GBP/JPY clings to mild losses above 160.00 on BoJ policymakers’ divide, downbeat UK business confidence


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  • GBP/JPY bounces off intraday low but stays negative on a day.
  • BoJ Summary of Opinions suggest policymakers are divided considering higher inflation.
  • UK Business Confidence gauge slumps to the lowest levels since 2009.
  • Sluggish markets restrict immediate moves, Tokyo inflation eyed.

GBP/JPY picks up bids to extend the latest rebound from the intraday low past 160.00 heading into Thursday’s London open. Even so, the cross-currency pair remains bearish on a day around 160.45 at the latest.

The opening of the European and British markets seemed to have allowed the GBP/JPY pair traders to consolidate the daily losses amid sluggish market conditions ahead of the key US data concerning growth and spending.

Elsewhere, the Bank of Japan's (BoJ) Summary of Opinions underpins the bearish bias of the GBP/JPY pair as policymakers are divided over the exit of the ultra-easy monetary policy considering the increasing inflation. “The divergence in views highlights the challenge policymakers face in determining whether the recent cost-driven rise in inflation will shift to one backed by robust demand and higher wages - a prerequisite for raising ultra-low interest rates,” said Reuters.

On the other hand, fears of economic slowdown in the UK escalate amid downbeat prints of the British business sentiment index shared by Bloomberg. The Institute of Chartered Accountants in England and Wales said Thursday that its latest monitor of business sentiment dropped to an index reading of -23.4, the weakest since 2009. The last survey, published in November, stood at -16.9. Bloomberg also mentioned that the Federation of Small Businesses’ confidence index dropped to -46 points in the final quarter of 2022 from -36 in the third quarter. With this, the sentiment gauge dropped to the lowest level since 2014.

It should be noted that the anxiety ahead of the next week’s bumper calendar comprising multiple key central bank meetings and Friday’s Tokyo Consumer Price Index (CPI) for January, expected 4.4% versus 4.0% prior, also weigh on the GBP/JPY prices. Furthermore, the downbeat performance of the Treasury bond yields adds to the bearish catalysts’ list for the quote.

Technical analysis

Although a two-week-old support line puts a floor under the GBP/JPY prices near 160.00, the recovery remains elusive unless the quote provides a daily closing beyond the 200-Exponential Moving Average (EMA), around 162.20 by the press time.

Additional important levels

Overview
Today last price 160.46
Today Daily Change -0.21
Today Daily Change % -0.13%
Today daily open 160.67
 
Trends
Daily SMA20 159.22
Daily SMA50 162.97
Daily SMA100 163.93
Daily SMA200 163.42
 
Levels
Previous Daily High 160.93
Previous Daily Low 159.51
Previous Weekly High 161.54
Previous Weekly Low 156.06
Previous Monthly High 169.28
Previous Monthly Low 157.84
Daily Fibonacci 38.2% 160.38
Daily Fibonacci 61.8% 160.05
Daily Pivot Point S1 159.81
Daily Pivot Point S2 158.95
Daily Pivot Point S3 158.39
Daily Pivot Point R1 161.23
Daily Pivot Point R2 161.79
Daily Pivot Point R3 162.65

 

 

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