GBP/JPY Price Analysis: Jumps to fresh high since December 2015 as BoJ’s Ueda tames inflation woes

GBP/JPY bulls cheer dovish comments from Bank of Japan (BoJ) Governor Kazuo Ueda by leaping to a fresh high since December 2015, up 0.55% intraday around 180.40 during early Friday morning in London.

That said, the BoJ kept the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields with the band of +/-0.50% earlier in the day by expecting softer inflation pressure to arrive. To defend the view, BoJ’s Ueda recently said, “More time will be needed to meet the central bank’s 2% inflation target.”

Also read: BoJ’s Ueda: More time needed to meet BoJ’s 2% inflation target

Although the BoJ-inspired rally has fewer fundamental hurdles, the technical details suggest a pullback in the GBP/JPY price amid the overbought RSI (14) line, as well as the quote’s battle with the horizontal area comprising levels marked in September-October 2015, near 180.40-80.

Even if the quote rises past 180.80, the 181.00 round figure and 78.6% Fibonacci Expansion (FE) of its moves from September 2020 to December 2022, near 186.30 and the 190.00 round figure will challenge the GBP/JPY bulls.

Meanwhile, the GBP/JPY pair’s failure to provide a weekly closing beyond 180.80 can trigger a pullback toward the 180.00 round figure and then to the 61.8% Fibonacci retracement level of around 179.50.

Above all, the GBP/JPY buyers remain hopeful unless witnessing the weekly close below the previous resistance line from April 2022, near 176.20 by the press time.

GBP/JPY: Weekly chart

Trend: Pullback expected