GBP/JPY jumps above 151.50 amid BOE optimism, risk-on mood

GBP/JPY prints refresh daily gains on Friday in the Asian trading hours.
Hawkish BOE keeps sterling on higher edge against USD, Euro.
Downbeat PMI and CPI weigh on the Japanese yen amid risk-on mood.

GBP/JPY extends its previous day’s gain on Friday and trades above one-week high. The pair remained on a track of weekly gains after starting the week on a subdued note. At the time of writing, the GBP/JPY pair is trading at 151.60 up 0.16% for the day.

The British pound rose against its peers on super Thursday following a surprised hawkish tone from the Bank of England (BOE). The BOE in its September policy meeting remained committed to maintaining interest rates and quantitative easing levels (QE) at existing settings but warned of the higher inflation level. The Bank’s Monetary Policy Committee (MPC) maintained its status-quo and kept the interest rate at 0.1%. Two MPC members Dave Ramsden and Michael Saunders voted for an early end to government bond purchases.     

Furthermore, the UK Brexit Minister remained firm on his stance and urged the European Union (EU) to respond urgently to Britain’s demand for alteration to the post-Brexit trade deal involving Northern Ireland (NI).

It is worth noting that the S&P 500 Futures is trading at 4,447 with 0.20% gains.

On the other hand, the Japanese yen remained on the backfoot as investors digested the latest FOMC policy update and remained optimistic that China’s Everngrande debt crisis could be contained. In addition to that, the sentiment was further down surroundign the currency after  the release of the dismal economic data. The Jibun Bank Manufacturing Purchasing Managers Index (PMI) declined 51.2 in September as compared to 52.7 in August. The Consumer Price Index (CPI) decreased 0.4% in August on a yearly basis, after a 0.3% drop in a month earlier. It is much below the Bank of Japan’s  (BOJ) core inflation target of 2%.

As for now, investors are waiting for the UK CBI Distributive Trades data to take fresh trading impetus.


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