GBP/JPY holds onto gains, parks at 155.00 as Tokyo opens

GBP/JPY is currently trading just over the 155.00 handle, testing 155.10. The pair gained for the second straight day, making a new high for the week. The British Sterling has gained on the Yen appreciably since August of 2017, adding 11% to its value in six months.

Both the Sterling and the Yen are contenders this week, with the GBP shrugging off Brexit concerns and mixed economic data, and the JPY continuing to gain strength despite dovish rhetoric from multiple leading members of the Bank of Japan. Both the Bank of England and the BoJ have positive expectations for their respetive economies, but both readily admit that negative risks still exist for both countries. A recently-leaked Brexit document highlighted the potential economic risk associated if the UK leaves the Eurozone without a trade agreement in place. The leaked document was explained away as being an unofficial draft, and markets promptly disregarded it. The revelation of the document's existence did create calls for full reports on Brexit to be released by the UK government, however, and incumbent Prime Minister Theresa May vowed to make finalized Brexit impact research publicly available, to the chagrin of her electoral peers, increasing calls for a no-confidence vote in PM May's leadership from backbenchers within her ruling Tory Conservative party.

Japan's central banking heirarchy has been flummoxed by the Yen lately, as traders and investors continue to pile into the Japanese currency on expectations of tightening monetary policy from the BoJ occuring sooner rather than later. BoJ Governor Haruhiko Kuroda has been insistent lately that the BoJ has no plans to begin winding down their QQE program until economic indicators begin to consistently show that growth, or more specficially inflation, is achieving and maintaining acceptable levels. Positive inflation, in itself no small feat for the archipelagical nation, is still well below satisfactory targets for the BoJ, who are adamant they will not consider winding down their easing program just because the European Central Bank and the Federal Reserve are racing to do so.

Despite market confidence in the Yen, the Sterling was the bigger winner yesterday, claiming ground during the London session for the second day in a row, and appears to have no intention of giving any of it back with GBP/JPY lifting slightly heading into Tokyo.Economic data for either country remains light heading through the week, though both currencies can expect a volatility boost when the US announces their monthly Non-Farm Payrolls at the end of the week. NFP data drops at 13:30 GMT.

GBP/JPY Technical Levels

The Sterling has gained againt the Yen impressively over the last six months, but long-term traders will note most of those gains occured last September, and upward momentum for GBP/JPY has been halting at times. The pair still rests well above the 200-day SMA, and H4 charts still depict a currency pair with some bullish potential behind it.  Immediate swing support/resistance rests at 154.63 and 155.28 respectively,  with yesterday's high/low priced at 155.35/153.56. Today's pivot points are:

R2: 156.39
R1: 155.64
PP:  154.60
S1: 153.85
S2: 152.81