GBP/JPY drops below 172.00 amid higher-than-projected Japan Inflation

GBP/JPY has slipped sharply below 172.00 amid a surprise jump in Japan’s inflation.
Higher-than-projected Japan’s inflation numbers won’t impact BoJ’s prolonged ultra-dovish policy stance.
Investors are anticipating that the BoE would not bring down inflation to half by the end of the year.

Sagar Dua FXStreet

The GBP/JPY pair has witnessed a steep fall after failing to sustain above the immediate resistance of 172.00 in the Asian session. The cross has faced selling pressure as the Statistics Bureau of Japan has reported higher-than-anticipated inflation data for April.

National headline Consumer Price Index (CPI) jumped to 3.5% from the prior release of 3.2% while the street was anticipating a deceleration to 2.5%. Core CPI that doesn’t include food and energy prices accelerated to 4.1% vs. the consensus of 3.4% and the former release of 3.8%.

The release of the higher-than-projected inflation numbers would provide some relief to Bank of Japan (BoJ) policymakers but won’t impact their prolonged ultra-dovish policy stance. BoJ Kazuo Ueda has already conveyed that inflation projections are softening and the central bank would do whatever is required to keep inflation steadily above the 2% target.

Meanwhile, the Pound Sterling has remained solid in the past few trading sessions as the United Kingdom inflation is not showing promising signs of deceleration ahead. Investors are anticipating that the Bank of England (BoE) would not bring down inflation to half by the end of the year. BoE Governor Andrew Bailey has already conveyed that they underestimated the strength and persistence of inflation.

Further, UK Finance Minister Jeremy Hunt has promised a decline in tax burden from households, which would fuel retail demand further.

On Thursday, the UK Office for National Statistics (ONS) reported that 18% of UK firms are looking to pass on the impact of higher input prices and costly employment to end-consumers vs. 23% of firms recorded in the last survey.

GBP/JPY

Overview
Today last price	171.69
Today Daily Change	-0.43
Today Daily Change %	-0.25
Today daily open	172.12

Trends
Daily SMA20	169.45
Daily SMA50	165.97
Daily SMA100	163.23
Daily SMA200	163.87

Levels
Previous Daily High	172.16
Previous Daily Low	171.19
Previous Weekly High	171.18
Previous Weekly Low	167.84
Previous Monthly High	171.18
Previous Monthly Low	162.78
Daily Fibonacci 38.2%	171.79
Daily Fibonacci 61.8%	171.56
Daily Pivot Point S1	171.48
Daily Pivot Point S2	170.85
Daily Pivot Point S3	170.51
Daily Pivot Point R1	172.46
Daily Pivot Point R2	172.8
Daily Pivot Point R3	173.43

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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