• EUR/JPY gains positive traction for the second straight day, though the upside seems limited.
• A combination of factors undermines the safe-haven JPY and lends some support to the cross.
• Geopolitical tensions and BoJ rate hike bets to limit the JPY losses, warranting caution for bulls. 

The EUR/JPY cross attracts some dip-buying following the previous day's modest pullback from over a one-week top and sticks to its intraday gains through the early European session on Tuesday. Spot prices currently trade just above the mid-161.00s, up nearly 0.50% for the day, and draw support from the offered tone surrounding the Japanese Yen (JPY).

Against the backdrop of the recent dovish remarks by Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, a positive tone around the equity markets is seen undermining demand for the safe-haven JPY. In fact, Uchida said last week that the central bank won't hike rates when markets are unstable. Furthermore, a former BoJ board member Makoto Sakurai predicted a rate hike only by March 2025 citing the recent market turmoil and the low likelihood of a rapid economic recovery.