GBP/JPY aims to test a two-week high around 169.00 as Japan considers Cabinet reshuffle

The GBP/JPY pair has extended its recovery and is looking to shift its business above the 168.00 hurdle in the Tokyo session. The cross is marching towards a two-week high around 169.00 as the market mood is turning cheerful. The Pound Sterling is expected to continue its upside momentum despite expectations of a slowdown in the rate hike pace by the Bank of England (BOE).

Meanwhile, the street is still discussing over Autumn Statement whether it has managed to restore confidence and ability in UK’s economic prospects or has dwindled the situation for projections.

Renewables and energy solutions provider Shell is reconsidering its plans of expansion in Britain’s energy system after the announcement of windfall taxes from the novel UK leadership. UK PM Rishi Sunak and Chancellor Jeremy Hunt have escalated the tax rate to 35% from 25% in their long-awaited “memorial service for Trussonomics”,

David Bunch, Shell’s UK chairman told the Telegraph that the expanded levy announced in the Chancellor’s Autumn Statement is forcing the company to re-examine a slew of projects in the pipeline, from North Sea investments to renewable energy schemes.

On UK’s interest rate projections, Economists at UOB have maintained their view of a 50 basis point (bps) move at its December monetary policy meeting. They believe that the BOE still has a little way to go, given that Hunt has decided to delay much of the pain from the fiscal consolidation, which means that fiscal policy will do little to fight inflation.”

Meanwhile, investors in Tokyo are getting anxious as Japan’s administration is planning to reshuffle its Cabinet by the year-end, Japan PM Fumio Kishida told to Mainichi. This may bring some volatility in the Japanese yen for a while. On the economic front, investors are awaiting the release of the PMI numbers, which will release on Thursday. The Jibun Bank Manufacturing PMI is seen as stable at 50.7. While Services PMI is expected to decline marginally to 53.1.