GBP/JPY drops below 134.00 amid fresh challenges to risk
|- GBP/JPY prints intra-day low, defies previous two-day gains, as risk-tone gets heavy.
- Pandemic fears returned to the table following the latest virus data.
- Japanese Machinery Orders, Trade Balance exert additional burden.
- The struggle to find national leader amid the UK PM Johnson’s absence, ministers push for build a home antibody test.
GBP/JPY fails to hold onto the previous two-day advances while declining to 133.85, down 0.21%, as Wednesday’s Asian session gathers momentum. In addition to the worries concerning the UK PM’s health status and rising coronavirus (COVID-19) numbers at home, recently upbeat data from Japan also weighed on the pair.
The BBC tried to strike a positive tone while citing secret talks between the ministers on how to rollback the lockdown. However, those headlines fail to gain consideration amid worries for the UK PM Boris Johnson’s health while he is under intensive care.
Although the UK PM’s spokesperson said the Tory leader is stable overnight, doubts are mounting and joined by the largest single-day increase in virus-led deaths to 6,159 weigh on the market’s risk-tone. It should also be noted that Japan’s PM Shinzo Abe announced emergencies due to the virus in six states including Tokyo the previous day.
Also exerting downside pressure on the pair are Japan’s upbeat figures for February month Machinery Orders and Trade Balance data.
That said, the US 10-year Treasury yields decline three basis points (bps) to 0.70% whereas stocks in Japan mark mild losses of near 0.20% by the press time.
Looking forward, Japan’s March month Eco Watchers survey can offer immediate direction to the pair whereas updates relating to the COVID-19 will keep the driver’s seat.
Technical analysis
Buyers will look for entry beyond a 100-day EMA level of 136.00.
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