GBP/JPY bears attack 163.00 as UK’s political, economic woes join risk-off mood
|- GBP/JPY takes offers to refresh intraday low, prints five-day downtrend.
- Fears of economic slowdown propel risk-aversion wave.
- UK’s Conservatives brace for another attempt to oust PM Johnson, BCC data portrays pessimism in Britain.
- US holiday could restrict market moves but risk catalysts are the key for fresh impulse.
GBP/JPY renews intraday low around 163.00 as risk-aversion intensifies during Monday’s Asian session. The bearish bias also takes clues from the downbeat signals surrounding the UK’s political and economic plays.
Having failed to remove UK Prime Minister (PM) Boris Johnson in their first attempt, the Conservative Party members eye another effort to oust the British leader, as signaled by the UK Telegraph. The news mentioned, “Opponents of the Prime Minister will try to overhaul 1922 Committee rules so that another leadership challenge can be triggered immediately.”
Elsewhere, the latest survey from the British Chambers of Commerce (BCC) mentioned that 54% of more than 5,700 companies it surveyed between May 16 and June 9 expected turnover to increase over the next 12 months. This is down from 63% in the previous survey and the lowest share since late 2020, when many businesses were under some form of COVID restrictions, per Reuters. The news also stated, “British companies have turned increasingly glum about the outlook, with inflation surging and investment plans looking stagnant.”
In Japan, news from Nikkei suggests that the elections are likely to favor the ruling party in Japan. The same hints at fewer challenges for the Bank of Japan’s (BOJ) easy money policies, which in turn could have probed the GBP/JPY bears but did not.
It’s worth noting that the market’s risk-off mood recently cheered the downbeat US PMIs as the ISM Manufacturing PMI for June slumped to the lowest levels in two years, to 53.0 versus 54.9 expected and 56.1 prior. Following the data, ANZ Bank said, “Surveyed data from both PMIs and the US ISM are all pointing to faltering orders growth, lower backlogs of work indices and softer production over the summer. It is hard to escape the growing growth pessimism, which is also fanning expectations of a peak in both inflation and central bank hawkishness.
Moving on, the US holiday and a light calendar may restrict GBP/JPY moves but sour sentiment can keep the sellers hopeful.
Technical analysis
Unless bouncing back beyond the 21-DMA hurdle surrounding 165.35, GBP/JPY bears keep eyes on the seven-week-old support line, near 162.00 by the press time.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.