- GBP/JPY indecisive in Tokyo trading.
- UK CPI data due at 09:30 GMT today.
GBP/JPY is stepping lightly in Asia markets, fidgeting around 150.42 following a flat Monday.
The pair has had a rough go of things lately, closing lower or flat for six of the last seven trading days. With the threat of interest rate increases looming on the horizon, traders have been flighty and prone to fits of risk aversion, dumping equities and risk assets in order to pile into safe havens. With the UK showing steady upticks in economic growth and the Bank of England (BoE) preparing to begin tightening their monetary policy, the era of easy money for global markets is set to end, leaving risk appetite in a precarious position.
The UK will be dropping their CPI data today at 09:30 GMT; a slight contraction in price growth is anticipated by market forecasts, with analysts calling for a 2.9% reading compared to the previous 3.0%.
Adding to the pair’s woes is the Yen’s relentless strength recently; as the Yen continues to be the market’s safe haven of choice, despite relentless soothing from figures at the Bank of Japan, reminding markets that the BoJ is not inclined to begin raising reates anytime soon in an attempt to keep the Yen weighted down while Japan’s economy struggles to continue adding to its inflation numbers.
With built-in volatility always high for this pair, swing points are plentiful and varied, with resistance stacking at 151.05, followed by 152.15 and 152.70 right behind. Short action is currently being contested by support from 150.35 and 149.50; a further breakdown from this region could see the pair into the 147.50 region in short order.