- GBP/JPY approaches multi-year highs as Yen weakens further.
- The chances increase that the BoJ's verbal intervention will translate into real intervention.
- Tokyo CPI inflation and BoJ rate call heading into Friday.
The GBP/JPY pair reached new multi-year highs on Thursday, as the pair approaches the 195.00 level. The Japanese Yen (JPY) continues to weaken in the broader currency market, prompting increasing rhetoric from the Bank of Japan (BoJ) about direct intervention in currency markets to shore up the beleaguered JPY. The BoJ is expected to discuss intervention in favor of the yen at its final monetary policy meeting, scheduled for Friday.
Inflation as measured by the Tokyo Consumer Price Index (CPI) will be released early on Friday, and markets expect the main gauge of Japanese inflation to remain at 2.6% for the year to April. Tokyo's core CPI inflation (headline inflation minus volatile food and energy prices) is expected to decline slightly to 2.7% over the same period, from 2.9% previously.
The BoJ's latest interest rate decision and monetary policy statement will also be released early on Friday, and markets will be watching for signs of BoJ intervention in the currency market. Markets will also be keeping an eye on any announced changes to the BoJ's bond-buying program.
A press conference led by BoJ Governor Kazuo Ueda is expected following the latest BoJ rate call.
GBP/JPY Technical Outlook
The Guppy has accelerated its exit from a recent technical range to approach the 195.00 area, and the pair has reached a new multi-year high. Further bullish momentum will take GBP/JPY to all-time highs, while bearish pullbacks will seek a technical bottom at 192.70.
GBP/JPY will close for the third consecutive day in the green, and the daily candlesticks continue to hold above the 200-day EMA at 185.08.
GBP/JPY hourly chart
GBP/JPY daily chart
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.
