GBP/JPY looks for a firm direction below 135.00, risk-tone stays heavy

GBP/JPY struggles for direction while taking rounds to 134.60 amid the initial hour of Tokyo open on Thursday. The pair registered downside on Wednesday as the coronavirus (COVID-19) crisis weighed on the risk-tone. Traders will keep eyes on the pandemic details, updates from the BOE policymakers, credit condition survey for fresh impetus.

The Telegraph’s report that the Treasury is expected to unveil a sweeping rescue package for start-up businesses within days failed to cheer the pair buyers amid surging virus fatalities in the UK.

“The Department of Health and Social Care says a total of 12,868 people have now died in hospitals around the UK. The 761 new deaths announced on Wednesday represent a fall on the equivalent figure reported yesterday; 778,” said the Guardian.

Though, the news that Penlon’s ESO2 device becomes the first model to get the green light from the UK’s healthcare regulator offered relief amid the lack of ventilators in Britain.

On the other hand, Japanese policymakers remain ready for cash handouts, further monetary policy easing to combat the virus that has so far infected more than two million people globally.

Considering the data, UK’s March month BRC Like-For-Like Retail Sales slipped below -0.4% prior to -3.5% whereas Japan’s Business Confidence, as per the Reuters Tankan survey, plunged to fresh decade lows in April.

While portraying the risk-tone, the US 10-year treasury yields seesaw around 0.64% with Japan’s NIKKEI down 1.8% to 19,200 by the press time.

Given the lack of major data, except for BOE’s first quarter (Q1) Credit Conditions Survey and a speech by the BOE policymaker Silvana Tenreyro, the pair traders will keep eyes on the updates concerning the epidemic for near-term direction.

Technical analysis

An area between 133.10 and 136.40, comprising 21-day and 50-day SMAs respectively, limit the pair’s nearby moves.