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  • GBP/JPY bounces off intraday low, trims mild losses from two-week top.
  • Risks benefit from economic recovery hopes, Biden’s readiness to aler spending plan.
  • Chatters surrounding China, Russia and covid strains test the bulls.
  • Japan’s Tertiary Index for February, UK employment for March becomes the key.

GBP/JPY picks up bids near 151.20, down 0.06% intraday, as markets in Tokyo open for Tuesday’s trading. The pair earlier pulled back from two-week tops before bouncing off 151.08 the latest. It’s worth mentioning that the market optimism backed the quote during the previous two days.

While chatters surrounding the BOJ’s readiness to alter inflation targets in the upcoming meet favor JPY sellers, amid hopes of further stimulus, headlines from the US Senate become the key. US President Joe Biden finally realized the fears looming over his $2.25 trillion bill and stepped back to compromise on certain key issues like taxes.

Also on the risk-positive side were the faster covid vaccinations in the UK, Israel and the US while unlock optimism in Britain favor GBP/JPY bulls.

Alternatively, fears of covid strains and escalation infections in Europe and Asia challenge the optimism. Further, Russia-Ukrain tussle joins the Sino-American tension to weigh on the risk-on mood.

Amid these plays, S&P 500 Futures rise 0.15% after stepping back from the record top the previous day. Though, Japan’s Nikkei 225 drops 1.73% amid virus woes in Tokyo and surrounding prefectures

Looking forward, risk catalysts will be the key ahead of Japan’s Tertiary Industry Index, prior -1.7% MoM, as well as the UK’s employment figures for March. Among them, the headline, Claimant Count Change may ease to 24.5K from 86.6K whereas the Unemployment rate can rise to 5.1% versus 5.0%.

Technical analysis

Although GBP/JPY sellers may resist entries above 50-day SMA, near 149.90, bulls need a clear break above 152.20-30 area to keep the reins.