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  • Sterling continuing to play into the weak side against the safe-haven Yen.
  • Japan data for Tuesday is coming in on the soft side, leaving traders prone to risk flights into the JPY.

The GBP/JPY is knocking around the 146.00 level heading into Tuesday’s Asian market session, after seeing a quick trip lower at the week’s open, kicking down from a high of 146.40 and finding a floor near 145.65.

Monday was a thin, low-volume day for markets with little of note on the macro calendar, and trading was tightly constrained within recent highs and lows as the Sterling continues to shift in place as traders await fresh Brexit headlines after the EU rejected the latest proposal to come out of the UK.

The Yen is seeing some mild strengthening in early Tuesday action, taking the GBP/JPY back down to 145.80 after the Nikkei Manufacturing PMI for July came in softer than expected, printing at 51.6 versus the forecast 53.2, with the last reading coming in at 53.0. Markets are also awaiting further market operations from the Bank of Japan (BoJ), which bought up Japanese government bonds in open markets yesterday for the first time since February of this year, and further operations are expected on Wednesday.

GBP/JPY levels to watch

The Guppy is hanging close to recent lows set at 145.65, and a continued drop will be seeing further support from late June’s swing low into 143.75, while bulls have a tough climb ahead of them to reclaim July’s highs over the 149.00 critical level.