GBP/JPY breached chart territory above 197.00 for the first time since September 2008, as markets confronted the Bank of Japan (BoJ) head-on, precipitating a significant decline in the Yen to multi-decade lows.
The BoJ opted to maintain its hyper-easy monetary policy, triggering a widespread selloff of the Japanese currency across the board. The central bank announced plans to resume large-scale purchases of Japanese government bonds, yet BoJ Governor Kazuo Ueda’s remarks offered little substance on Yen exchange rates, inflation, and interest rate forward guidance, leading to disappointment among market participants.
Looking ahead to the upcoming week, the economic calendar for the UK appears relatively light, while Japan’s Retail Sales figures, scheduled for early Tuesday, are poised to attract attention. Projections indicate a moderation in Retail Trade growth to 2.2% for the year ending in March, down from the previous period’s 4.6%.
Turning to the technical outlook for GBP/JPY, the currency pair continues its ascent into extremely bullish chart territory above the key 197.00 handle. Having surged by 10.2% since the early 2024 bounce from the 200-day Exponential Moving Average (EMA) around 180.00, the Guppy is on track for its fourth consecutive month-on-month gain. Notably, GBP/JPY has soared by over 50% from its lows near 130.00 recorded in 2020, underscoring the remarkable strength of the British Pound against the Japanese Yen.
