EUR/JPY remains overvalued near its recent multi-decade highs, which is part of what makes it an attractive short ahead of the French general election, BNP Paribas strategists believe.

In Monday's European mid-afternoon trading, EUR/JPY was last quoted at 169.0960.

"With EUR/JPY trading just below the highest levels of the cycle, we think the risk reward to short the cross is attractive," the strategists wrote in a Monday note to clients.

"While most EUR crosses now trade at a discount to BNP Paribas STEER fair value, weak levels of the JPY mean that the EUR/JPY cross trades at a premium to fair value," they added.

Factors that could lead to losses for EUR/JPY over the coming weeks include signs of a faster slowdown in US economic growth, and a further rise in the political risk premium embedded in the euro, they said.

BNP's French election risk premium indicator has risen to 37 in the last week, close to its maximum value of 50, but the strategy team says there's still room for bets against the euro to grow ahead of the French ballot on June 30 and July 7.

The bank advocated selling EUR/JPY with a stop-loss at 173.0 and a target of 157.0.