- GBP/JPY consolidates the heaviest losses in a week inside a choppy range.
- UK PM Johnson reiterates June 21 deadline for unlock, British pay growth jumps in April.
- Japan data came in mixed, emergency likely to extend to another prefecture.
- Risk catalysts remain as the key, covid, tapering should gain more attention.
GBP/JPY refreshes intraday high to 154.24 as markets in Tokyo open for Thursday’s trading. Even so, the pair stays inside a 30-pip range established after bears snapped a three-day uptrend on Wednesday.
The pair’s latest uptick could be traced to news from The Times saying, “UK PM Boris Johnson is increasingly optimistic that COVID-19 restrictions can end as planned on June 21 after early data suggested that the Indian variant was not spreading as fast as previously feared.” Also on the positive side could be the Financial Times article mentioning, “Pay growth at large UK employers picked up sharply in April as the easing of lockdown restrictions boosted business confidence in the economic outlook.”
On the same line, Japan’s downbeat Machinery Orders and Merchandise Trade Balance, for March and April respectively, battle Reuters Tankan Survey signaling Japan manufacturers’ mood rises to highest since late 2018 to confuse the pair traders. Furthermore, news that Japan is up for adding one more prefecture, Okinawa, to its emergency list, weigh on the mood and test the quote’s latest moves.
It’s worth mentioning that the market’s risk-off mood, backed by the US FOMC Minutes, weighed on the pair the previous day. In doing so, the quote ignored the upbeat UK Consumer Price Index (CPI) and comments from the Bank of Japan.
Amid these plays, S&P 500 Futures print mild losses and so do Japan’s Nikkei 225. However, the US 10-year Treasury yields pause after the previous day’s heavy run-up to 1.69%.
Having witnessed a dull reaction to the recent catalysts, GBP/JPY traders may wait for more risk-related headlines for fresh impulse. Among them, the coronavirus (COVID-19) and the tapering should be the keywords.
Technical analysis
Bearish candlestick formation, hanging man, on the daily chart suggests further GBP/JPY weakness towards the monthly support line near 153.20.
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