Rate differentials · ECB vs BoJ · priced as of 12 November 2026
EUR/JPY interest rate differential: ECB vs BoJ
As of 12 November 2026, the EUR/JPY interest rate differential is +125 bp: the ECB's deposit rate at 2.50% against the BoJ's policy rate at 1.25%, in favour of the euro. Markets price the gap at +129 bp in six months and +126 bp in twelve.
Over the next six months, markets price little change in the gap over six months (+4 bp). That six-month gap has moved +2 bp in a month.
The rate spread, now and priced ahead
| ECB (EUR) | BoJ (JPY) | Gap | |
|---|---|---|---|
| Policy rate now | 2.50% | 1.25% | +125 bp |
| Priced in 6 months | 3.00% | 1.71% | +129 bp |
| Priced in 12 months | 3.17% | 1.91% | +126 bp |
| 6-month gap a month ago | 2.93% | 1.66% | +127 bp |
The gap is EUR minus JPY, in basis points (100 bp is one percentage point). Six and twelve months out is the rate implied after each bank's last meeting on or before that date. Market pricing, not a forecast. Each bank's meeting-by-meeting odds: ECB · BoJ.
The carry on EUR/JPY
The euro: the ECB pays 2.50% against 1.25%, a gap of +125 bp. Holding the higher-yielding currency against the lower earns roughly that gap a year before costs, which is what the carry trade collects; a move in the exchange rate can outweigh it.
How the gap feeds the exchange rate, and when it does not: rate differentials explained and the carry trade explained.
Questions
What is the EUR/JPY interest rate differential?
As of 12 November 2026, the EUR/JPY interest rate differential is +125 bp: the ECB's deposit rate at 2.50% against the BoJ's policy rate at 1.25%, in favour of the euro. Markets price the gap at +129 bp in six months and +126 bp in twelve.
Is the ECB–BoJ gap priced to widen or narrow?
Markets price little change in the gap over six months (+4 bp), from +125 bp now to +129 bp. A month ago (13 October) the same six-month gap was priced at +127 bp, so it has moved +2 bp since. That is market pricing, not a forecast.
Which side of EUR/JPY has the carry?
The euro: the ECB pays 2.50% against 1.25%, a gap of +125 bp. Holding the higher-yielding currency against the lower earns roughly that gap a year before costs, which is what the carry trade collects; a move in the exchange rate can outweigh it.
Where does this pricing come from?
Each bank's priced path comes from the market instrument behind it: Exchange-traded futures, WatchTower model for ECB, Exchange-traded futures, WatchTower model for BoJ. The rate six or twelve months out is the one implied after the last meeting on or before that date. The month-ago figure is from our daily snapshot of the same curves.
More on EUR/JPY: EUR/JPY analysis · EUR/JPY retail sentiment · EUR/JPY seasonality · Euro outlook · Euro COT positioning · ECB rate expectations · Eurozone economic surprises · Japanese Yen outlook · Japanese Yen COT positioning · BoJ rate expectations · Japanese economic surprises
Other rate differentials: EUR/USD −150 bp · USD/JPY +275 bp · EUR/GBP −150 bp · EUR/CHF +250 bp · EUR/AUD −235 bp · EUR/CAD 0 bp · EUR/NZD −25 bp · GBP/JPY +275 bp · AUD/JPY +360 bp · NZD/JPY +150 bp · all 28
In WatchTower Terminal, the Rate spread panel draws the EUR/JPY gap against the price. Nothing here is financial advice.