GBP/JPY recovers from 183.00 as BoE maintains status quo straight for second time
|- GBP/JPY finds support near 183.00 on neutral BoE policy.
- BoE Bailey said that interest rates will remain elevated for a longer period.
- The BoJ focuses on exiting easy policy sometime next year.
The GBP/JPY pair discovers an intermediate support near 183.00 after correcting from two-day high. The cross finds a cushion as the Bank of England (BoE) has kept interest rates unchanged at 5.25% for the second time in a row.
Investors were hoping that the BoE would keep interest rates steady as the United Kingdom economy is going through a vulnerable phase. Weak consumer spending, labor demand, and business activities must have leaned BoE policymakers toward supporting a stable interest rate policy. The steady monetary policy was taken after 6-3 vote split in which Jonathan Haskel, Megan Greene and Katherine Mann voted for a 25 basis points (bps) rate hike.
BoE Governor Andrew Bailey, in his monetary policy statement, said that interest rates will remain elevated for a longer period and further interest rate hikes would be appropriate if needed. He further added that the central bank is making good progress in bringing down inflation to 2%.
The inflation forecast report from the BoE shows that inflation will come down to 4.6% by the end of 2023. This indicates that the promise of halving inflation to 5.4% made by UK Prime Minister Rishi Suank in January at time when inflation was at 10.7% would be fulfilled.
On the Japanese Yen front, the Bank of Japan (BoJ) is expected to continue to maintain an expansionary monetary policy but will focus on exiting from a decade-long easy policy sometime next year, as reported by Reuters. The BoJ is committed to keep inflation comfortably above 2% and it should be supported by wage growth.
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.