GBP/JPY consolidates recent losses around 154.00 amid Brexit, covid drama

GBP/JPY remains subdued, holds lower ground, near 153.80 amid the early Monday morning in Asia. In doing so, the cross-currency pair snaps a two-day downtrend while keeping the previous week’s recovery moves, the first in four, amid mixed market sentiment.

Japanese yen (JPY) bears the burden of the US Treasury yields, as well as the coronavirus (COVID-19) conditions at home. The US 10-year Treasury yield snapped a five-week downtrend by Friday’s end as the Fed policymakers keep rejecting the reflation fears despite upbeat data.

That said, US Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge o Inflation, jumped to the highest in the near three decades with a 3.4% YoY print. On the other hand, Japan’s holding of the Olympics and Paralympics gains a huge criticism at home amid tense covid conditions. “A total of 15,419,331 people have been tested as of midnight June 25, 2021,” said the Japanese Health Ministry, per Kyodo News.

In the case of the UK, Health Minister Matt Hancock’s resignation, due to breaking the virus-led restrictions, framed by him, couldn’t gain any major negative market reaction. The reason could be linked to the mildly upbeat Brexit scenario in Northern Ireland (NI) as the BBC said, “The taoiseach (Irish PM) has insisted he is listening to unionist concerns over the Northern Ireland Protocol.”

It’s worth noting that the EU-UK tussle over Brexit is far from over despite five years of winning Brexit votes and a government change. The recent tension looms over NI and fishing rights.

Moving on, a lack of major data, events can restrict GBP/JPY moves but discussions over Brexit and covid conditions in the UK, not to forget Fedspeak, will be the key to follow.

Technical analysis

Despite bouncing off 50-day SMA, around 153.60, GBP/JPY bulls need to cross the monthly hurdle around 155.00 to regain the controls.