EUR/JPY attracts some sellers to near 163.50 as safe-haven demand grows

• EUR/JPY tumbles to near 163.50 in Monday's early European session. 
• Uncertainty surrounding Trump's tariffs underpins safe-haven currencies like the JPY. 
• Eurozone inflation surges in April. 

The EUR/JPY cross extends the decline to around 163.50 during the early European session on Monday. The Japanese Yen (JPY) edges higher against the Euro (EUR) on the rising safe-haven demand amid the economic uncertainty. The Eurozone Sentix Investor Confidence is due later on Monday. Trading activity is expected to remain subdued on Monday due to a public holiday in Japan.

US President Donald Trump reiterated that China was open to a trade deal but offered no concrete details or timeline. Additionally, Trump noted that the US has no plans to speak with Xi Jinping this week. Investor sentiment shifts sour due to persistent global trade uncertainties, which provide some support to the JPY and act as a headwind for the cross.

The Bank of Japan (BoJ) kept its interest rate unchanged at 0.5% by a unanimous vote and cut its growth forecast last week. The dovish guidance by the Japanese central bank might be the upside for the JPY in the near term. The BOJ slashed its economic growth forecast for the fiscal year ending March 2026 to 0.5% from 1.1% projected three months ago. It also cut its growth forecast to a 0.7% expansion for the following fiscal year from 1.0% in January.

On the EUR's front, Eurozone inflation rose more than expected in April, potentially complicating the European Central Bank's (ECB) path to lower interest rates further in the coming months. ECB President Christine Lagarde said the central bank would be data dependent when making interest rate decisions. The ECB last cut interest rates in April, bringing its deposit facility rate to 2.25%, down from highs of 4.00% in mid-2023.