- GBP/JPY has bounced above 173.00 as the odds of the Bank of England raising interest rates remain optimistic.
- The BOJ has pledged to continue QE to push inflation above 2%.
- In the UK, consumer spending on durable goods has fallen as households face the burden of higher interest rates and persistent inflation.
The crossing GBP/JPY has shown a V-shaped recovery after posting an intraday low of 172.68 in the European session. The cross has seen stellar buying interest as the Bank of Japan has vowed to continue QE to push inflation steadily above 2%.
Inflation in Japan is mainly due to increased imported goods, while being less dependent on domestic demand and higher wages. The BOJ constantly strives to raise wages in order to increase domestic demand to keep inflation above 2%.
This week, Japan’s gross domestic product (GDP) will be the focus of much attention. Thursday’s GDP is expected to grow 0.5%, up from the previous expansion of 0.4% quarterly. Annualized GDP for the first quarter would remain at 1.6%.
Elsewhere, the Bank of England (BoE) has awarded £10m in six-month long-term index-linked repo trades (ILTRs) to match the banks’ offers. Investors should note that the ILTR allows market participants to borrow central bank reserves for a period of six months in exchange for less liquid assets.
In the UK, consumer spending on non-essential items has slowed as households face the burden of higher interest rates and persistent inflation. Households are restricting their purchase of durable goods as interest obligations are higher over time.
The British Retail Consortium (BRC) said spending at its members’ stores rose 3.9% on an annual basis last month, well above the 1.1% drop a year ago, however sales were below of the rise of 5.2% in April, as reported by Reuters. However, the odds of a further interest rate hike by the Bank of England (BoE) remain firm in order to secure UK Prime Minister Rishi Sunak’s promise to halve inflation. .
|Last price today||173.12|
|today’s daily change||-0.52|
|today’s daily variation||-0.30|
|today’s daily opening||173.64|
|previous daily high||174.38|
|previous daily low||172.85|
|Previous Weekly High||174.68|
|previous weekly low||172.53|
|Previous Monthly High||174.28|
|Previous monthly minimum||167.84|
|Fibonacci daily 38.2||173.44|
|Fibonacci 61.8% daily||173.8|
|Daily Pivot Point S1||172.87|
|Daily Pivot Point S2||172.1|
|Daily Pivot Point S3||171.35|
|Daily Pivot Point R1||174.4|
|Daily Pivot Point R2||175.15|
|Daily Pivot Point R3||175.93|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.