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  • GBP/JPY gaining negative traction after breaking to fresh 6-week lows below 132.00.
  • The pound dives across hit by fears of a strong COVID-19 impact on the UK economy. 
  • Investors hold their breath ahead of Thursday’s BoE meeting.

 

The pound has depreciated against the Japanese yen for the fourth consecutive day on Wednesday, increasing its negative momentum after breaking recent lows near 132.00. The pair is accelerating its downtrend on a reversal from last week highs at 135.45, reaching levels nearly 3% lower, right under 131.00.

Pound hurt by the COVID-19 impact in the UK

The sterling has dropped across the board, hitting 6-week lows against the safe-haven yen as the severe impact of the coronavirus is forcing the UK to lag the European countries on easing restrictions.

Furthermore, the UK Constriction PMI has shown that building activity suffered its deepest setback on record in April, exceeding the most negative expectations and heightening fears about a severe economic impact from the pandemic.

The market has reacted selling the pound, especially against safer assets such as the USD and the Japanese yen, with an eye on the Bank of England’s meeting due on Thursday. The BoE is expected to release its quarterly growth forecasts after warning about a deep contraction in the Q2.

GBP/JPY Key levels to watch