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  • GBP/JPY holds onto recovery gains around intraday high.
  • US CDC updates mask mandate for fully vaccinated people.
  • UK turns cautious over covid passport, unlock amid Indian variant spread, Japan eyes stringent emergency rules.
  • Risk catalysts become the key amid a light calendar in Asia.

GBP/JPY reverses the previous day’s losses, recently picking up bids near 153.85, during Friday’s Asian session. In doing so, the quote takes clues from the risk-on mood while paying a little heed to the downbeat coronavirus (COVID-19) updates from the UK and Japan.

A doubling of the Indian strain of covid in a week recently troubled the British policymakers. “Local and regional restrictions to tackle the Indian Covid variant cannot be ruled out,” said the UK government, per BBC during its late Thursday news. In a separate report, the UK Telegraph mentioned Britain scaling back the covid passport plans amid ministers’ questions on the health benefits it will offer.

On the other hand, Japan’s little success in taming the deadly virus spread at home pushes the government to introduce more stringent coronavirus restrictions in 5 more prefectures. Details shared by Kyodo News mentioned the new measures could come into effect from May 16 and will remain active until June 01.

It’s worth mentioning that the Middle East tensions also probe the risk-on mood.

Alternatively, the US Centers for Disease Control and Prevention (CDC) push for no mask-mandate for fully vaccinated people, which in turn helped trading sentiment to extend the previous day’s optimism. The markets turned positive on Thursday after the US Jobless Claims dropped to the pre-pandemic levels, defying the woes portrayed earlier by the US Nonfarm Payrolls (NFP). Also on the positive side were comments from the Federal Reserve (Fed) and the Bank of England (BOE) officials shrugging off reflation woes while also praising the economic recovery moves.

Amid these plays, S&P 500 Futures is up 0.20% after all the three Wall Street benchmarks closed in positive for the first time in a week the previous day. That said, Japan’s Nikkei 225 is up 1.8% by the press time.

Given the lack of major data/events in both Japan and the UK, GBP/JPY traders will keep their eyes on the risk catalysts for fresh impulse.

Technical analysis

Although the 154.00 threshold and the recent high around 154.50 guards short-term GBP/JPY upside, the previous resistance line from April 20 near 153.15 holds the gate for sellers’ entry.

 

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