GBP/JPY juggles around 153.50 on rising commodity prices, investors await BOE and BOJ policy

The GBP/JPY pair is grinding higher from the last few trading sessions as rising prices of the commodities such as crude oil, grains and metals are hurting the fiscal deficit of Japan. The cross is juggling around 153.50 amid a broader sell-off in the Japanese yen.

The sanctions on Russia by the Western leaders have boiled the oil prices, which eventually has pushed the prices of food products, energy, and metals higher. Japan is a leading importer of the majority of the commodities and the Asia major is importing the expensive commodities at a higher exchange rate of US dollars, which has forced investors to dump the Japanese yen. It is worth noting that Japan is the fifth-largest consumer of oil in the global market. Rising outflow is posing a threat of worsening fiscal deficit for Japan, going forward.

Meanwhile, the Bank of England (BOE) is preparing for its third 25 basis points (bps) interest rate hike on Thursday’s monetary policy meet. The BOE has raised its interest rates by 25 bps twice in December and February. The BOE forecasted that its inflation rate would peak at about 7.25% in April, when household energy tariffs are due to rise by more than half in the pre-Ukraine crisis period, as per Reuters. After the Ukraine crisis, inflation is likely to overstep the earlier expectation swiftly and BOE may resort to further extension in their benchmark rates.

The BOE will not seldom release its new benchmark rates, but the Bank of Japan (BOJ) will also come up with its monetary policy on Friday. A power-pack week is likely to keep the asset volatile and hopes we can see a change in the trend further.