* Yen extends rebound after comments about its 'excessive weakness'
* Dollar/yen briefly breaks below key retracement level
* Eurogroup president Juncker says euro is 'dangerously high'
* Euro pulls back from multi-month peaks vs USD, yen
* Dollar/yen falls 0.5 pct, euro/dollar down 0.1 pct
TOKYO, Jan 16 (Reuters) - The yen extended its gain for the second day on Wednesday after a warning about its excessive weakness by a Japanese cabinet minister while the euro also slipped after a top European official complained about its recent gains.
Traders unwound bearish positions in the Japanese currency after Japan's Economics Minister Akira Amari cautioned on Tuesday that excessive yen weakness could boost import prices, hurting people's livelihood.
"The yen's fall has been quite fast so far. If its fall is too fast, its reversal could be fast as well. It seems to me that Amari's comments were intentional efforts to curb overheating in the market," said Kimihiko Tomita, head of forex at State Street in Tokyo.
The dollar fell to as low as 88.06 yen, breaking below a key support at 88.25, the 50 percent retracement of its Jan. 9-14 rally from 86.825 to a 2-1/2-year high of 89.67, as well as tenkan line on the Ichimoku charts.
It last traded at 88.33 yen, down 0.5 percent from late U.S. levels.
Many market players think the yen's latest rebound is a small correction in a long-term downtrend, which started late last year on expectations that the Bank of Japan will be forced to take bold action to reflate a sluggish economy.
New Prime Minister Shinzo Abe has been very vocal about getting the BOJ to tackle deflation once and for all, calling for a two percent inflation target. The BOJ is widely expected to do just that at its policy meeting on Jan 21-22.
But some traders say there could be buy-on-rumour-sell-on-fact type of selling in dollar/yen after that meeting.
"I haven't come across anyone who seriously thinks that the BOJ can boost inflation to two percent," said Takako Masai, head of forex at Shinsei Bank, adding that the BOJ meeting could offer a good chance to exit bearish bets on the yen.
The euro also slipped 0.6 percent against the yen to 117.28 yen, as the single currency lost momentum after Jean-Claude Juncker, the chairman of the euro zone finance ministers said the euro was "dangerously high".
The single currency also eased against the dollar, trading at $1.3289, down 0.1 percent on the day and pulling back from an 11-month high of $1.3404 set on Monday.
Traders said Juncker's comments simply gave investors an excuse to cash in on recent gains and did not necessarily represent a reversal in its uptrend.
The euro had rallied some 3 percent against the dollar in the past few sessions after the European Central Bank (ECB) sounded more upbeat about the region's recovery.
With most of the attention focused on the yen as well as the euro, the dollar shuffled sideways against other currencies. The Australian dollar, for instance, was little changed at $1.0561 , still within striking distance of a 4-month peak near $1.0600 set last week.