- GBP/JPY has surrendered the immediate support of 166.00 on higher-than-expected Japan GDP data.
- UK next PM Liz Truss has picked battle against higher energy prices and inflation.
- The BOJ has failed in accelerating household spending despite a prudent monetary policy.
The GBP/JPY pair has sensed selling pressure after failing to sustain above 166.20 in the early Tokyo session. The asset has slipped below 166.00 after the release of upbeat Japanese Gross Domestic Product (GDP) data. The Japanese GDP data has landed at 0.9%, higher than the forecasts of 0.7% and the prior release of 0.5%. Also, the annual data has improved meaningfully to 3.5% against the expectations and the prior print of 2.9% and 2.2% respectively.
This week, downbeat Japan’s Overall Household Spending data weakened the yen bulls. The economic data declined to 3.4% than the expectations of 4.2% and the prior release of 3.5%. Despite the prolonged efforts of the Bank of Japan (BOJ) in accelerating overall demand by flushing liquidity into the economy continuously, household expenditure remained vulnerable.
Earlier, the cross displayed a sheer upside move from a low of 161.00 after Liz Truss was declared the next UK Prime Minister. The announcement brought a sense of political stability to the UK economy as UK political environment was filthy after the resignation of ex-UK PM Boris Johnson. Apart from that, Truss picked a battle with accelerating energy prices and inflation rate, which strengthened the pound bulls.
Conservative party leader announced a fund of 130 billion pounds for freezing bills. Under this, the new cabinet will set a fixed unit price for energy suppliers to sell gas & electricity to households. Adding to that, household taxes will be trimmed, which will remain supportive for them to combat higher payouts. Also, the Cabinet will focus on making more investments and scaling up the employment generation process.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Uptrend remains capped by 0.6650
AUD/USD could not sustain the multi-session march north and faltered once again ahead of the 0.6650 region on the back of the strong rebound in the Greenback and the prevailing risk-off mood.
EUR/USD meets a tough barrier around 1.0800
The resurgence of the bid bias in the Greenback weighed on the risk-linked assets and motivated EUR/USD to retreat to the 1.0750 region after another failed attempt to retest the 1.0800 zone.
Gold eases toward $2,310 amid a better market mood
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Bitcoin price coils up for 20% climb, Standard Chartered forecasts more gains for BTC
Bitcoin (BTC) price remains devoid of directional bias, trading sideways as part of a horizontal chop. However, this may be short-lived as BTC price action consolidates in a bullish reversal pattern on the one-day time frame.
What does stagflation mean for commodity prices?
What a difference a quarter makes. The Federal Reserve rang in 2024 with a bout of optimism that inflation was coming down to their 2% target. But that optimism has now evaporated as the reality of stickier-than-expected inflation becomes more evident.