The Japanese yen slipped on Tuesday as concerns of a trade war between USA and China eased, lifting demand for riskier assets. Global risk appetite was shaken last week after U.S. President Donald Trump moved to impose tariffs on Chinese goods and Beijing threatened similar measures, sparking fears of a trade war between the world's two largest economies.

Reports of talks under the radar between the United States and China have relieved fears momentarily, that global trade frictions could escalate out of control, with traders hoping any actual U.S. measures will be much more modest than first announced.

The diminishing concerns over U.S.-China trade tensions whetted investor appetite for riskier assets. Wall Street recorded its best day in 2-1/2 years and the Dow Jones Industrial Average saw its third-biggest point gain ever on Monday.

USD/JPY jumped more than 0.2 percent to 105.75. The greenback bounced back from a 16-month low of 104.56 on Monday. EUR/JPY also rose, more than 0.3 percent to 131.81, after surging 1.4 percent on Monday for its biggest one-day percentage gain since June 2017.

EUR/USD is up 0.2 percent to 1.2465, climbing over Monday's high of 1.24615, which was the euro's strongest level since mid-February. Comments from Jens Weidmann, Germany's likely candidate to become the European Central Bank's next president, helped bolster the euro on Monday.