GBP/JPY extends rally to near 179.00 in hopes of an unchanged BoJ policy

GBP/JPY has continued its two-day winning streak due to solid hopes of further BoE-BoJ policy divergence.
To maintain Japan’s inflation steadily above 2%, a tweak in the BoJ monetary policy is less likely.
BoE Bailey assured that inflation will come down, but it will take longer than expected.

Sagar Dua FXStreet

The GBP/JPY pair has stretched its rally to near 178.80 in the European session. The cross has extended its two-day winning streak as investors are hoping that the Bank of Japan (BoJ) will not alter its interest rate policy on Friday considering the fact that the Japanese economy needs monetary stimulus to elevate wages and the overall demand.

The asset is expected to continue its upside momentum as an unchanged interest rate decision by BoJ Governor Kazuo Ueda and a continuation of the rate-hiking regime by the Bank of England (BoE) would further widen the BoE-BoJ policy divergence.

BoJ Ueda is constantly reiterating the need for consistent monetary stimulus as historic high inflationary pressures in Japan are inspired by higher import prices. In order to maintain inflation steadily above 2% a tweak in the monetary policy is less likely.

Meanwhile, the odds of one more interest rate hike by the BoE have turned resilient further as United Kingdom’s labor market conditions have strengthened more and monthly Gross Domestic Product (GDP) is expanding and food prices are still near a 45-year high. Therefore, BoE Governor Andrew Bailey has no other option than to raise interest rates further.

Current UK inflation is at 8.7% on an annualized basis and can be tackled by the continuation of the interest rate hike spell. On Tuesday, BoE Governor Andrew Bailey assured that inflation will come down, but it will take longer than expected while speaking before the House of Lords Economic Affairs Committee.

GBP/JPY

Overview
Today last price	178.82
Today Daily Change	1.44
Today Daily Change %	0.81
Today daily open	177.38

Trends
Daily SMA20	173.77
Daily SMA50	170.36
Daily SMA100	166.02
Daily SMA200	164.97

Levels
Previous Daily High	177.44
Previous Daily Low	176.45
Previous Weekly High	175.54
Previous Weekly Low	172.67
Previous Monthly High	174.28
Previous Monthly Low	167.84
Daily Fibonacci 38.2%	177.06
Daily Fibonacci 61.8%	176.82
Daily Pivot Point S1	176.74
Daily Pivot Point S2	176.1
Daily Pivot Point S3	175.75
Daily Pivot Point R1	177.73
Daily Pivot Point R2	178.07
Daily Pivot Point R3	178.71

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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