- GBP/JPY drops to intraday low while extending pullback from 132.88.
- UK policymakers increase China’s hardships step-by-step.
- Japan’s headline inflation, unemployment data came in better than forecasts.
- Cautious sentiment ahead of US President Donald Trump’s press conference on China weighs on the market’s risk-tone.
GBP/JPY declines 132.38, intraday low of 132.33, down 0.20% on a day, amid the initial Tokyo open on Friday. In addition to the upbeat economics from Japan, a shift in the markets’ risk sentiment also weighs on the pair off-late.
Japan’s Tokyo Consumer Price Index (CPI), Retail Sales and Unemployment Rate managed to conquer pessimism surrounded by 12-year low Industrial Production growth.
Read: Tokyo area May Core CPI +0.2% YoY smashes estimates of ‐0.2％
Looking at the UK’s side, the British government is likely to join the US counterpart to combat against Beijing. Having earlier stopped China’s Huawei from widely operating the 5G network, despite agreed earlier, the Tory government seeks alliance to avoid reliance on Chinese technologies, per The Times.
Additionally, CNN’s news suggesting the British policymakers’ readiness to help Hong Kong residents also marks the UK PM Boris Johnson’s dislike for the Asian major. “The UK government is mulling giving greater visiting rights to certain Hong Kong residents unless the Chinese government suspends a controversial proposed national security law. On Thursday, Britain’s Home Office Secretary, Priti Patel, said she and the Foreign Secretary Dominic Raab were exploring ways to provide more rights for BNO passport holders, including extending a path to citizenship,” said the news.
It’s worth mentioning that the uncertainty surrounding the Brexit and Tory government’s tough time handling the coronavirus (COVID-19) also weigh on the British Pound.
On the other hand, US President Donald Trump is all set to hold China conference on 18:00 GMT. Market’s fear of further sanctions as the Republican leader has already mentioned doing the same by the week’s end.
As a result, the US 10-year Treasury yields drop 2.8 basis points (bps) to 0.677% while Japan’s NIKKEI drops 0.90% to 21,728 by the press time.
Given the lack of major data up for publishing from the UK, Japan’s House Starts and Consumer Confidence may offer intermediate moves ahead of the US President Trump’s press conference.
Technical analysis
Failure to cross 50-day SMA, currently near 132.80, drags the quote towards a nine-day-old ascending trend line around 132.10.
Share
