- GBP/JPY takes offers to refresh one-week low following the data release.
- UK’s monthly GDP, Manufacturing Production and Industrial Production dropped below market forecast and prior in April.
- Retreat in the US bond coupons, pessimism surrounding Brexit, UK politics exert downside pressure.
- Statements from UK’s Truss can offer intraday directions, BOE, BOJ appear as the key.
GBP/JPY remains pressured for the third consecutive day, refreshing one-week low, as bears attack 165.00 level heading into Monday’s London open. The cross-currency pair’s latest weakness could be linked to the downbeat UK data, as well as a halt in the US Treasury yields’ rally.
That said, the UK Gross Domestic Product for April dropped to -0.3% MoM versus 0.2% expected and -0.1% prior. The Manufacturing Production and Industrial Production also weakened during the stated month while the trade deficit eased.
Read: UK Manufacturing Production falls 1% MoM in April vs. 0.2% expected
Fears of Britain’s economic hardships grow momentum after the latest raft of the UK data, suggesting a tough challenge for the Bank of England (BOE) as it tries to regain the market’s confidence.
Other than the data, fears of the harsh Brexit and the European Union’s punitive actions in case of the UK’s Northern Ireland Protocol (NIP) repeal also weigh on the GBP/JPY prices.
Additionally, a pause in the US Treasury yields and the Bank of Japan’s (BOJ) intervention also exert downside pressure on the quote. That said, the US 10-year Treasury yields retreat from the monthly high surrounding 3.20%, around 3.17% by the press time, as traders await the Fed’s verdict.
Moving on, GBP/JPY traders need to pay attention to a speech from UK’s Foreign Minister Liz Truss in the House of Commons as the policymaker will unveil details of how Britain will alter NIP. The same could exert additional downside pressure on the GBP/JPY prices.
Technical analysis
Unless providing a daily closing beyond April’s high near 168.45, GBP/JPY remains directed towards the highs marked in March and late April, respectively around 164.65 and 164.25.
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