EUR/JPY twitching when USD/JPY moves is mostly arithmetic

[Shadow Trader]

It can feel like EUR/JPY has a mind of its own, jerking whenever USD/JPY makes a move. There is a mechanical reason that has nothing to do with sentiment.

EUR/JPY is a cross. At the deepest level its price is tied to EUR/USD and USD/JPY. A tick in USD/JPY changes the implied cross at once, even if nobody has touched EUR/JPY directly.

Two things look the same on the chart and are not. One is a genuine move in euro demand against yen. The other is a USD/JPY move being passed through into the cross. The second is shallow: the cross follows the leg, and often the move is exactly as large as the leg implies. The first usually comes with EUR/USD moving the right way.

A quick way to separate them is to check the other leg. If USD/JPY jumps and EUR/USD stays flat, EUR/JPY is mostly pass-through. If both legs push in the same direction, the cross is getting a real impulse.

For scalpers, the pass-through version is a decent warning that the cross has little independent follow-through, and the spread on the cross is often wider than on the leg, so chasing it costs more.

Do you see the same pattern on GBP/JPY, and does the pass-through effect look stronger during Tokyo hours?