EUR/JPY appreciates above 163.00 with the Yen retreating across the board

• The Euro extends its rebound from 161.00 to levels above 163.00.

• The Yen is losing ground alongside a sharp decline in super long-term Japanese yields.

• ECB’s Lagarde affirmed the Euro’s position as a viable alternative to the US Dollar.

The Euro is trading higher for the second consecutive day, still fuelled by the delay of Trump’s deadline to avoid 50% tariffs in the US, while the Yen declines alongside super long-term Japanese yields.

The pair extended its rebound from last week’s lows, at 161.00, to levels above 163.00 and is aiming for the 163.45 area, favoured by broad-based Yen weakness.

Japan is considering reducing long-term bond sales

News that Japan’s Ministry of Finance is considering reducing the super long-term bond issuance for the fiscal year has triggered a sharp decline in the yields of the 20, 30, and 40 JGB yields.

The hawkish comments by BoJ Governour Ueda, highlighting the upside risks of inflation, and keeping hopes for further rate hikes alive, have failed to provide any significant support to the Yen.

The Euro, on the other hand, maintains a moderately positive tone on higher hopes of a deal with the US, which will avoid high tariffs.

Comments from ECB President Lagarde on Monday, suggesting that the Euro might become a viable alternative to the US Dollar amid Trump’s erratic trade policy and growing concerns of a debt crisis, have provided additional support to the common currency.