- GBP/JPY loses more than 4%, on its worst day in months.
- Next medium-term support at 158.00.
- The Japanese yen shoots up after the decision of the Bank of Japan.
The GBP/JPY cross loses more than 700 points this Tuesday amid a recovery in the Japanese yen after the Bank of Japan’s monetary policy announcement.
The Bank of Japan’s decision to raise the upper range of its 10-year bond yield curve control from 0.25% to 0.50% boosted the Japanese yen, which is seeing one of the most significant gains in years. The announcement caught markets by surprise, triggering a sell-off in government bonds.
“Governor Kuroda stressed that the measure did not represent a hardening and that it had been taken to improve the functioning of the markets. Although the official interest rate remained at -0.10%, speculation will increase about a possible rate hike next year next. We thought it would be in the second half, but today’s decision suggests it could come as early as the first. Also, given Governor Kuroda’s propensity for surprises, this increase could come on his watch rather than his successor,” explain analysts at Brown Brothers Harriman.
The yen advances this Tuesday more than 4% against its main rivals. GBP/JPY is back more than 700 points, on track for the lowest daily close since September 29.
The cross recently bottomed out at 159.06 and is hovering around 159.40. Before the BoJ decision, it was trading at 166.70. down, the next support zone is around 158.00.
GBP/JPY Technical Levels
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.
