GBP/JPY pushes towards 150.00 as risk sentiment improves
- GBP/JPY manages to recover part of its previous day’s losses on Tuesday.
- Fed’s risk, higher energy prices, Brexit woes kept a lid on sterling performance.
- Market sentiment improves as China’s Evergrande group concerns ease.
GBP/JPY edges higher on Tuesday in the early European trading hours. The pair took a recovery road after the previous day’s selling rout on fears of Chinese property giant Evergrande default risk.
At the time of writing, the GBP/JPY pair is trading at 149.81,up 0.24% for the day.
Investors digested Evengrande default fears and geared up for the upcoming two-day Fed’s policy meeting.
The British pound gains on improved risk-appetite despite depressing economic factors. As per the report, the UK energy shock has left the government on the brink of providing a financial bailout to energy companies. But comments from the UK’s Business Secretary Kwasi Kwarteng, who dismissed energy shortage warnings boosted the sentiment around the sterling.
US Treasury Secretary Janet Yellen will be meeting with UK Prime Minister Boris Johnson on Wednesday to discuss a wider trade deal and better access to the country for vaccinated travelers.
Furthermore, the European Union (EU) diplomat said they would be discussing the method to resolve the disagreement with the UK over trade between Great Britain and Northern Ireland but will not renegotiate the former deal agreed in the Brexit divorce arrangement.
It is worth noting that the S&P 500 Futures is trading at 4,370 with 0.49% gains.
Meanwhile, Japanese Finance Minister Taro Aso said it would take much more time to achieve its budget target of a primary balance surplus by fiscal 2025.
As for now, investors are waiting for the UK CBI Industrial Trends orders to gauge the market sentiment.
GBP/JPY additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
