EUR/JPY tumbles below 156.50 amid safe-haven demand

• EUR/JPY loses traction to around 156.25 in Thursday's Asian session, down 0.24% on the day. 
• Trump's tariff threat boosts the safe-haven flows, supporting the Japanese Yen. 
• The Eurozone inflation eases, triggering the ECB rate cut bets.

The EUR/JPY cross falls to near 156.25 during the Europeam session on Tuesday. The Japanese Yen (JYP) edges higher due to the risk-off mood and fresh fear of trade tension from US President Donald Trump. Investors will keep an eye on the Fedspeak later on Tuesday. 

Demand for safe-haven assets surges amid growing concerns over tariff risks. Japan's Finance Minister Katsunobu Kato said early Tuesday that the country is not pursuing a policy of devaluing the Japanese Yen. Additionally, concerns about the potential economic slowdown in the US increased expectations of further interest rate cuts by the Federal Reserve (Fed). This, in turn, could weigh on the Greenback and benefit the JPY's relative safe-haven status.

The rising speculation that the Bank of Japan (BoJ) will raise the interest rate sooner than later might continue to underpin the JPY. The BoJ is widely anticipated to continue hiking this year, supported by improving economic conditions, rising prices, and stronger wage growth, which align with the Japanese central bank's policy normalization efforts.

On the Euro's front, the European Central Bank (ECB) is expected to cut its Deposit Facility Rate by 25 basis points (bps) to 2.5%, weighing in the Euro (EUR). Consumer price inflation in the Eurozone slowed to 2.4% in February from the previous reading of 2.5% and moving a step closer to the ECB's 2% target.