GBP/JPY climbing higher in Tokyo trading
|- GBP/JPY moving up as Yen declines.
- BoJ trying to protect growth from strong currency.
GBP/JPY gained on Tuesday and is continuing to climb in Tokyo trading, testing the 150.50 area as of writing.
The Yen has begun to recede following thinly-veiled threats from the Bank of Japan (BoJ) late last week. As the Yen has continued to strengthen in exchanges, the BoJ's rhetoric changed abruptly on Friday, stating that they are watching FX markets closely, and will intervene if they deem it necessary. This marks an abrupt shift in the central bank's tone, who up until this point has maintained a soothing, demure posture. With an elevated Yen threatening to eat away at the meager growth Japan is experiencing, a keen edge has developed to the BoJ's words.
Japan will see the Industry Activity Index at 04:30 GMT today, with foreign investment figures dropping later at 23:50.
The UK also has a slew of data coming out at 14:15, with a speech from the Bank of England's (BOE) Broadbent, followed by a trio of speeches from MPC Members Broadbent, Haldane, and Tenreyro. Inflation Report Hearings will also be happening through the day involving the BoE and the Financial Services Authority (FSA).
GBP/JPY Technicals
With the recent bullish correction, the pair has begun backing away from the 200-day SMA and is inching closer to the 34 EMA, currently sitting at 151.63. The pair is still in bull trend territory but will have to breach the swing lows acting as resistance before the longterm trend can resume to the upside. Support for the pair is currently priced in at the 150.00 handle, 148.77, and 148.13, while resistance has formed at 150.80 and 151.43.
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