COMMENT-Traders take note; EUR/JPY usually does this in March

March 5 (Reuters) - The euro could make gains against the Japanese yen this month, something it has done in March in 16 of the past 25 years, or 64% of the time. However seasonality should not be considered in isolation, it needs to be combined with other factors for it to be a useful tool.

EUR/JPY's long tail that formed on last week's candlestick line hinted at a downside rejection. The cross has seen a big rise this week to break above the 159.85 Fibo, a 50% retrace of the 164.90 to 154.80 (December to February) EBS drop, a close above which would likely lead to much bigger gains.

The gap in between the Bank of Japan and the European Central Bank is set to narrow in the weeks and months ahead, but it will remain sufficiently wide enough to continue to underpin EUR/JPY.

The euro extended its rally on Wednesday as Germany's proposed easing of its "debt break" and plans for a 500 billion euro ($531 billion) infrastructure fund boosted Europe's growth prospects despite global trade tensions worrying investors. Note the BOJ vows to keep raising rates despite Trump tariff risks.