GBP/JPY awaits fresh clues to extend recent recovery, UK’s Tories remain market favorite

• GBP/JPY traders catch a breath amid a lack of major catalysts, following a noticeable recovery.
• The UK’s Conservative Party, also known as Tories, keeps the helm of polls for the December election.
• Allegations from the opposition parties fail to defy Prime Minister Boris Johnson’s fame.

GBP/JPY stays modestly changed to 140.60 during Tuesday’s Asian session. The quote took a U-turn four week low on Monday as optimism surrounding the United Kingdom (UK) politics pleased buyers amid an overall risk-on sentiment.

The latest poll from Reuters showed that Support for British Prime Minister (PM) Boris Johnson’s Conservative Party narrowed to 41% from 40% last week. The same also shows that the Labour Party is now seen receiving 34%, up 2 points from last week’s 32%. Although this could be the result of the opposition’s criticism to the Tory manifesto, the confirmation from the BBC over the Conservative’s promise of 50,000 nurses and the Labour Party’s talks to dump the present leader Jeremy Corbyn to form a minority government seems to please the buyers.

The BBC accepted that it committed a mistake while conveying the Tory leader’s promise concerning nurses in National Healthcare System (NHS). The Independent recently said that the BBC  admitted it made a “mistake” by editing out the audience launching at Mr. Johnson in a BBC Question Time clip.  It also said that more nurses  for the  NHS  turned out to include almost 19,000 existing nurses the government simply wants to retain.

It should also be noted that the ex-PM Tony Blair and the Liberal Democratic Party member’s harsh criticism to the Conservative leader and authenticity of his promises were largely ignored.

On the data front, Japan’s October month Producer Price Index (PPI) for Services rose more than 0.5% prior to 2.1% on a YoY basis.

Further, Wall Street benchmarks closed at the record highs while the US 10-year treasury yields seesaw around 1.76% by the press time. Other than optimism surrounding the UK politics, increasing odds of the trade deal between the United States (US) and China also contributed to the market’s risk-on and have negatively affected the Japanese yen (JPY).

Given the lack of major data/events scheduled for publishing, markets will keep eyes on trade/political headlines for fresh directions.

Technical Analysis

Buyers now target a monthly top near 141.60 unless staying above the recent low of 140.50.