- The GBP/JPY slips down on Tuesday and is pressured by a combination of factors.
- The bets that the BOE could cut rates in August undermine the GBP and the crossing.
- The JPY attracts some safe refuge flows and also contributes to the fall of the torque.
The GBP/JPY crossing extends the backward drop in the previous day from the 199.20 region and attracts some follow -up sale during the Asian session on Tuesday. Cash prices go below the 198.00 level in the last hour and the fundamental background supports the case for an additional short -term depreciation movement.
The pound sterling (GBP) continues with its relative low performance after the increase in bets that the Bank of England (BOE) could cut interest rates in August, backed by a weak report of the United Kingdom labor market published earlier this month. The Japanese Yen (JPY), on the other hand, attracts some safe refuge flows amid the market anxiety before the key risks of this week’s central event events. This contributes even more to the tone offered of the GBP/JPY torque and validates the negative perspective.
However, operators could refrain from aggressive directional bets and choose to wait for the monetary policy update of the Bank of Japan (BOJ) on Thursday. Japan’s commercial agreement with the US has eliminated a key risk of the domestic economy and suggests that the conditions for the BOJ to raise interest rates could begin to occur. However, inflation cooling signs in Japan and internal political uncertainty could complicate the path of normalization of the Boj’s policy.
Therefore, investors will seek clues about the possibility of future increases in rates, which, in turn, will play a key role in influencing the JPY prices dynamics in the short term and will provide a significant impulse to the GBP/JPY crossing during the second half of the week. Meanwhile, the last commercial optimism could act as a wind against for the jpy of safe refuge and limit cash prices losses. The fundamental background, meanwhile, suggests that any recovery attempt will probably be sold.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. Yen Japanese was the strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.09% | -0.13% | -0.02% | -0.05% | 0.11% | 0.04% | |
| EUR | -0.06% | 0.03% | -0.21% | -0.08% | -0.09% | -0.06% | 0.00% | |
| GBP | -0.09% | -0.03% | -0.24% | -0.10% | -0.11% | -0.08% | -0.03% | |
| JPY | 0.13% | 0.21% | 0.24% | 0.09% | 0.07% | 0.17% | 0.28% | |
| CAD | 0.02% | 0.08% | 0.10% | -0.09% | -0.09% | 0.14% | 0.07% | |
| Aud | 0.05% | 0.09% | 0.11% | -0.07% | 0.09% | 0.06% | 0.08% | |
| NZD | -0.11% | 0.06% | 0.08% | -0.17% | -0.14% | -0.06% | 0.03% | |
| CHF | -0.04% | -0.00% | 0.03% | -0.28% | -0.07% | -0.08% | -0.03% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Japanese yen from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the JPY (base)/USD (quotation).
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.
