GBP/JPY drops from 188.00 on soft UK Inflation report

GBP/JPY corrects gradually from 188.00 as UK consumer inflation declines.
UK Sunak has fulfilled his promise of halving inflation to 5.4% by the year-end.
Investors expect that the pace of transition from BoJ’s ultra-easy monetary stance to policy normalization would be slow.

Sagar Dua FXStreet

The GBP/JPY pair drops after failing to sustain above the crucial resistance of 188.00. The cross fell as inflationary pressures in the United Kingdom economy remained softer than expectations.

The UK Office for National Statistics (ONS) has reported that the monthly headline Consumer Price Index (CPI) remained stagnant in October due to falling gas prices. The annual headline inflation rose by 4.6%, slower than expectations of 4.8% and the prior reading of 6.7%.

After a sharp decline in headline inflation, UK Prime Minister (PM) Rishi Sunak said that “while it is welcome news that prices are no longer rising as quickly, we know many people are continuing to struggle.”

A significant fall in headline inflation to 4.6% indicates that Rishi Sunak has fulfilled his promise of halving inflation to 5.4% by the year-end. The core inflation which doesn’t take volatile oil and food prices into consideration, decelerated to 5.7% against expectations of 5.8% and the former reading of 6.1%.

Producers cut prices of inputs and end-products at factory gates due to slowing demand from the domestic and overseas markets.

A soft UK inflation report has squeezed expectations of further policy-tightening by the Bank of England (BoE). Easing labor market conditions and inflation would allow BoE policymakers to keep interest rates unchanged at 5.25%.

Meanwhile, the broader appeal for the Japanese Yen remains downbeat as investors expect that the pace of transition from an ultra-easy monetary stance to policy normalization by the Bank of Japan (BoJ) would be extremely slow. A delay in stealth intervention plans by the Japanese authority has also impacted demand for the Japanese Yen.

GBP/JPY

Overview
Today last price	187.44
Today Daily Change	-0.39
Today Daily Change %	-0.21
Today daily open	187.83

Trends
Daily SMA20	183.75
Daily SMA50	182.99
Daily SMA100	183.02
Daily SMA200	175.52

Levels
Previous Daily High	188.29
Previous Daily Low	186.09
Previous Weekly High	185.97
Previous Weekly Low	184.55
Previous Monthly High	184.33
Previous Monthly Low	178.08
Daily Fibonacci 38.2%	187.45
Daily Fibonacci 61.8%	186.93
Daily Pivot Point S1	186.52
Daily Pivot Point S2	185.21
Daily Pivot Point S3	184.32
Daily Pivot Point R1	188.71
Daily Pivot Point R2	189.6
Daily Pivot Point R3	190.91

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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