GBP/JPY oscillates near 163.00, eyes 164.00 on BOJ’s ultra-loose monetary policy
|- GBP/JPY balances in a 162.81-163.25 range, sees more upside on BOJ’s dovish tone.
- The BOJ kept its interest rates unchanged at -0.1% and dictated dovish guidance.
- Investors are focusing on the extent of the rate hike by the BOE next week.
The GBP/JPY pair is gyrating in a 44-pip range in the Asian session amid an absence of any potential trigger that could provide a rationale for further direction. A directionless move in the cross has come after a stalwart rally, delivered on Thursday, after the Bank of Japan kept its interest rates unchanged at -0.1%.
The decision of a neutral stance by the BOJ came on the grounds of lower inflation and aggregate demand in Japan. The Consumer Price Index (CPI) figure in Japan is 1.2%, which is not sufficient for the BOJ to sound aggressive. Also, the growth rate in the Japanese economy has yet not reached its pre-pandemic levels, therefore prudent guidance has been conveyed by BOJ Governor Haruhiko Kuroda to spurt the aggregate demand.
Meanwhile, the pound bulls are outperforming against the Japanese yen on higher odds of a rate hike by the Bank of England (BOE) next week. The BOE will announce an interest rate decision next week, which is likely a rate hike by 25 basis points (bps). The UK inflation has recorded at 7% in March. In BOE’s last monetary policy meeting, BOE Governor Andrew Bailey elevated their interest rates by 50 basis points (bps) as inflation is galloping faster and in order to contain the inflation mess, the BOE can feature one more 50 bps rate hike, beyond the market consensus.
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.