- Yen pops on BoJ musings about interest rates.
- Sterling looking for a break ahead of UK inflation reports.
The GBP/JPY is sinking in early Tokyo trading, touching into 148.75 as the Sterling continues to stumble against the Japanese Yen.
The Yen is gaining traction in early Tuesday trading following comments from the Bank of Japan’s (BoJ) Governor Kuroda that highlighted the central bank’s concern about the long-term impacts and effects of low rates on the Japanese economy. Traders are reading into the comments and allowing postulation of the BoJ unexpectedly tightening their fiscal policy, driving the JPY higher.
Tuesday sees Inflation Hearings for the UK, beginning at 09:00 GMT, and the Sterling will be poised for stiff reactions after Public Sector Borrowing figures hit at 08:30 GMT, which are expected to come in at a £7.000 billion increase, far higher than the previous reading of £-0.262 billion. The Sterling has been pummeled lately by consistently bad economic figures, and GBP bulls are looking for a break.
GBP/JPY levels to watch
As FXStreet’s Flavio Tosti noted about the GBP/JPY, “the currency cross is trading in a bullish channel above its 50 and 100-period simple moving averages (SMA) but below its 200-period SMA suggesting a mild upward bias. Resistances are seen at the 149.50 and 150.00 swing highs followed by the 150.50 psychological level. To to the downside, investors will likely meet resistance at the 149.00 handle and at the 148.18 swing low.”
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