|

British Pound fills weekly bearish gap vs weaker JPY; GBP/JPY steadies below mid-213.00s

  • GBP/JPY rebounds from the vicinity of the 100-day SMA on Monday, albeit it lacks follow-through.
  • Easing political risks and the BoE’s hawkish signal lend support to the GBP and the cross.
  • Intervention fears keep the JPY bears on the defensive and cap the upside for spot prices.

The GBP/JPY cross attracts fresh buyers in the vicinity of the 100-day Simple Moving Average (SMA) support and fills a modest weekly bearish gap opening on Monday. Spot prices, however, lack follow-through and currently trade just below mid-213.00s during the early European session.

The British Pound (GBP) is underpinned by easing concerns over Prime Minister Keir Starmer’s position, especially after his Labour Party's heavy losses in English local elections and parliamentary votes in Scotland and Wales. Furthermore, the Bank of England's (BoE) signal that interest rate hikes could be appropriate if inflation remains persistent turned out to be another factor supporting the GBP and the GBP/JPY cross.

Meanwhile, the Japanese Yen's (JPY) underperformance could be attributed to economic risks stemming from renewed US-Iran tensions and the continued disruption to energy supplies from the Strait of Hormuz. However, speculations that Japanese officials might step in again to prop up the domestic currency hold back the JPY bears from placing aggressive bets and keep a lid on any meaningful upside for the GBP/JPY cross.

Reports last week showed that officials intervened in the FX market during holidays in early May, after having conducted JPY buying operations on April 30. Moreover, Japan's top currency diplomat, Atsushi Mimura, had said that Japan faces no constraints on how often it can intervene in currency markets and is in daily contact with US authorities. This, along with the hawkish Bank of Japan (BoJ), warrants caution for the GBP/JPY bulls.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.20%0.32%0.25%0.04%0.11%0.35%0.21%
EUR-0.20%0.12%0.00%-0.18%-0.08%0.15%0.00%
GBP-0.32%-0.12%-0.11%-0.30%-0.19%0.04%-0.12%
JPY-0.25%0.00%0.11%-0.19%-0.08%0.13%-0.02%
CAD-0.04%0.18%0.30%0.19%0.11%0.28%0.16%
AUD-0.11%0.08%0.19%0.08%-0.11%0.22%0.08%
NZD-0.35%-0.15%-0.04%-0.13%-0.28%-0.22%-0.13%
CHF-0.21%-0.00%0.12%0.02%-0.16%-0.08%0.13%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?
The Euro is not the sick man of Europe. France's bond market is
EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.
Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?