GBP/JPY snaps three-day winning streak to sub-133.00 despite broad risk-on
- GBP/JPY pulls back from two-week high as coronavirus risk looms.
- UK car output will be down more than 15% due to the virus.
- UK coronavirus death toll rose more than 100 in a day, BOE failed to offer any fireworks.
- Tokyo CPI mostly unchanged, Japan Economy Minister rules out declaring state of emergency.
Despite broadly positive trade sentiment, GBP/JPY fails to extend the previous run-up while declining to 132.80 amid Friday’s Asian session. The reason could be traced from the UK’s situation as far as the coronavirus (COVID-19) pandemic is concerned.
The latest report from the BBC suggests that the UK’s death toll has risen from 475 to 578, health officials have confirmed, with 11,658 confirmed cases. Additionally, Britain’s car industry body Society of Motor Manufacturers and Traders (SMMT) recently said that the virus will cut down the car output by 15%.
Elsewhere, Japan’s Tokyo Consumer Price Index numbers for March came in mostly near the previous levels while the BOJ offered to sell 800 billion Japanese yen in Japanese Government Bonds (JGBs) in Repo pact for March 30 to April 02. Furthermore, Japan’s Economy Minister Nishimura ruled out calls to announce state emergency amid virus outbreak in Tokyo.
The risk-tone remains mildly positive with the US 10-year treasury yields gaining two basis points to 0.83% while Japan’s NIKKEI also rising more than 2.0% to 19,050 by the press time.
On Thursday, the UK’s Retail Sales data registered heavy declines, to 0.0% from 0.8% forecast YoY, whereas the BOE matched wide expectations of no change into the current monetary policy.
Investors will now concentrate on the virus headlines amid the lack of major data/events.
Technical analysis
The sellers can recall a 10-day SMA level around 130.00 unless breaking March 10 low near 134.00.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
