The GBP/JPY has reacted to the Bank of England announcement with an initial rise to 163.20, daily high. Immediately after, the pair has lost about 270 pips before falling to a eight-day low at 160.47.
As expected, the UK central bank raised interest rates for the fourth time since December and the policy statement suggested some degree of tightening might still be appropriate in the coming months. The BoE raised rates by 25 basis points to 1%, their highest level since 2008. A divided Committee and dovish outlook have been key factors in sending sterling down.
On the other hand, a generally positive tone in equity markets undermined demand for the yen, which was pressured by the Bank of Japan’s more dovish stance. This, in turn, could help limit losses for the GBP/JPY pair.
GBP/JPY Levels
With the cross trading at time of writing above 160.67, shedding 1.45% daily, the next support appears at the psychological zone of 160.00. Further down, there’s room to fall to 159.63minimum of April 26 and of the last five weeks.
To the upside, initial resistance appears at 163.58yesterday’s roof Above awaits the region 164.00 Y 164.26maximum of April 28.
Source: Fx Street
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