GBP/JPY recovery stalls near 200.00 as focus shifts to UK Inflation


  • GBP/JPY recovery appears to have slowed near 200.00 as UK Inflation comes under the spotlight.
  • The UK annual headline inflation is expected to return to BoE’s 2% target.
  • The BoJ postponed plans to reduce bond-buying operations.

The GBP/JPY pair struggles to extend recovery above the psychological resistance of 200.00 in Tuesday’s New York session. The cross is expected to trade sideways as investors shift focus to the United Kingdom (UK) Consumer Price Index (CPI) data for May, which will be published on Wednesday.

Economists expect that the UK Office for National Statistics (ONS) will report a sharp decline in the annual core CPI, which strips off the more volatile items, to 3.5% from 3.9% in April. In the same period, the headline inflation is expected to return to the bank’s target of 2.0% from the prior reading of 2.3%. The monthly headline inflation is estimated to have grown at a faster pace of 0.4% from 0.3% in April.

A more-than-expected decline in UK inflation data will boost expectations of early rate cuts by the Bank of England (BoE). Though headline inflation is expected to return to 2%, investors will keenly focus on service inflation, which has been a major barrier to the BoE’s move towards policy normalization.

Inflation in the UK service sector is majorly driven by strong growth, which has turned out to be persistent in the past few months. Average earnings excluding bonuses, which is a measure of wage inflation, have grown steadily by 6.0% for a straight three-period period. The pace at which wages are growing is significantly higher than what is needed to build confidence among BoE officials to consider rate cuts.

On the Tokyo front, the Japanese Yen is weak across the FX domain as the Bank of Japan (BoJ) pushes plans of tapering bond-buying operations to the July meeting. BoJ Governor Kazuo Ueda left interest rates unchanged but didn’t rule out expectations for further policy tightening in July.

This week, the major trigger for the Japanese Yen will be the National CPI data for May, which will be published on Friday. National CPI excluding Fresh Food is estimated to have accelerated to 2.6% from the prior reading of 2.2% on a year-on-year basis.

GBP/JPY

Overview
Today last price 200.41
Today Daily Change 0.01
Today Daily Change % 0.00
Today daily open 200.4
 
Trends
Daily SMA20 199.76
Daily SMA50 196.38
Daily SMA100 193.09
Daily SMA200 188.43
 
Levels
Previous Daily High 200.46
Previous Daily Low 199.06
Previous Weekly High 201.62
Previous Weekly Low 198.92
Previous Monthly High 200.75
Previous Monthly Low 191.37
Daily Fibonacci 38.2% 199.93
Daily Fibonacci 61.8% 199.6
Daily Pivot Point S1 199.49
Daily Pivot Point S2 198.58
Daily Pivot Point S3 198.1
Daily Pivot Point R1 200.88
Daily Pivot Point R2 201.37
Daily Pivot Point R3 202.28

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD jumps toward 0.6750 after mostly upbeat Aussie jobs data

AUD/USD jumps toward 0.6750 after mostly upbeat Aussie jobs data

AUD/USD is picking up fresh toward 0.6750 in Asian trading on Thursday, The pair draws support from mostly upbeat Australian employment data for June, which fan RAB rate hike bets. Meanwhile, the US Dollar remains depressed amid Fed rate cut bets, capping the pair's downside. 

AUD/USD News

USD/JPY retakes 156.00 after suspected BoJ intervention-led drop

USD/JPY retakes 156.00 after suspected BoJ intervention-led drop

USD/JPY is back above 156.00, having witnessed a sharp drop amid thin liquidity in the early Asian hours on Thursday. The pair finds support from a modest uptick in the US Dollar alongside the US Treasury bond yields, reversing the suspected BoJ intervention-led sell-off. 

USD/JPY News

Gold price stays supported at $2,450 amid risk aversion, Fed easing bets

Gold price stays supported at $2,450 amid risk aversion, Fed easing bets

Gold price sees some fresh buying interest above $2,450 in the Asian session on Thursday, stalling a retracement from a fresh record high. Gold price cheers broad risk aversion and heightened Fed easing expectations ahead of mid-tier US data and more Fedspeak. 

Gold News

Ethereum ETF issuers file updated drafts, ETH staking still a possibility

Ethereum ETF issuers file updated drafts, ETH staking still a possibility

Ethereum is down 1% on Wednesday as issuers began filing their final spot ETH ETF S-1 drafts with the SEC in anticipation of a launch on July 23. Meanwhile, SEC commissioner Hester Peirce also said the regulator may reconsider its position on ETH staking within the ETFs.

Read more

ECB preview: Incoming data since June unlikely to shift the policy view

ECB preview: Incoming data since June unlikely to shift the policy view

Since the last ECB meeting five weeks ago in June, only a limited amount of new economic data has become available, and this data is unlikely to have significantly changed the ECB's perspective on the economy and consequently its policy stance.

Read more

Forex MAJORS

Cryptocurrencies

Signatures