- The GBP/JPY cross hit a new 16-year high of 201.32 on Thursday.
- JPY traders are gearing up ahead of the BoJ’s latest rate decision.
- Sterling markets are ignoring glitches in UK data.
GBP/JPY tested a new 16-year high above 201.00 on Thursday, hitting 201.32 before retreating to the previous day’s range as cross traders position themselves ahead of the latest Bank of Japan (BoJ) rate decision and the Monetary Policy Declaration. The BoJ’s latest rate statement is expected early on Friday, and Sterling traders will be keeping an eye on the latest UK Consumer Price Index (CPI) update next week.
UK data has generally faltered this week, with an unexpected rise in jobless claims and a sharper-than-anticipated contraction in industrial activity. However, GBP traders have largely ignored the UK’s gloomier economic outlook to strengthen the Guppy, as Japan’s ultra-loose monetary policy stance keeps the Yen unsupported against its major currency pairs.
The BoJ is widely expected to keep rates at 0% early on Friday, and investors are not expecting much movement from the Japanese central bank on tightening monetary policy. The economic calendar remains thin on the UK side, leaving GBP traders awaiting next Wednesday’s CPI inflation print, followed by the Bank of England (BoE) rate decision on Thursday. The BoE last voted 7 to 2 to keep interest rates at 5.25%, with only two members of the Monetary Policy Committee (MPC) voting for a rate cut.
GBP/JPY Technical Outlook
GBP/JPY hit a new 16-year high of 201.32 early on Thursday before quickly retreating to the 200 hourly EMA at 199.89. The pair remains firmly tilted towards bullish territory, but bearish momentum keeps the pair in a swinging upward consolidation pattern.
The Guppy closed five of the last six trading days in the green and is showing signs of bullish exhaustion. The pair could be set for a further decline to the 50-day EMA at 196.56, although GBP/JPY remains deep in bullish territory, trading above the 200-day EMA at 188.91.
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.
