GBP/JPY seesaws around 6-month low as Brexit woes, Yen strength persist

Despite witnessing a mild pullback from 6-month low, GBP/JPY carries its weakness as it takes the rounds to 134.28 during early Wednesday.

In addition to constant uncertainty factor surrounding the Brexit, recent improvement of the Japanese Yen (JPY) also weighs on the prices.

During his latest public appearances, Boris Johnson, who leads the UK Prime Minister’s (PM) race, continues to disrespect the EU’s previous deal concerning the Irish border issue. Mr. Johnson also raised prospects of the early general election, if elected, to remove the opposition Labour party leader Jeremy Corbyn’s political dominance.

It should also be noted that upbeat reports from the UK employment front and absence of any fresh bearish threats from the Bank of England (BOE) Governor Mark Carney were largely being ignored by the British Pound (GBP) traders.

On the contrary, the JPY benefited from the latest news of the Fitch affirming Japan’s credit rating ‘A’ amid stable outlook and the US and Japan trade deal. Also adding the Yen strength could be the doubts relating to the US-China trade deal and the political tussle between the US and Iran.

Global barometer of risk sentiment, the US 10-year treasury yield, declines nearly 2 basis points to 2.103% by the press time.

While Japanese economic calendar has no major data/events scheduled for release from now, investors can concentrate on macro news in addition to the UK Consumer Price Index (CPI) data for fresh impulse.

Technical Analysis

Chances of pair’s drop to January month low surrounding 131.80 remains on the cards as far as the quote traders beneath 61.8% Fibonacci retracement of 2016 – 2018 upside, at 136.10 now.