GBP/JPY Analysis Report: as the BOE fails to persuade bond purchasers, the price steadies below $169.00.

Nov 08, 2022

VOT Research Desk

With Tuesday’s London open approaching, the GBPJPY is stagnating at 168.80, stalling the two-day advance. By doing this, the cross-currency pair captures the market’s uncertainty due to conflicting cues and a lack of significant data or occurrences.

It should be noted, however, that a lacklustre reaction to the Bank of England’s (BOE) maiden operation to sell medium-term gilts appears to have recently teased the pair bears.

According to a new Barclays study, British companies may be in for a dismal Christmas as over half of families expect to reduce their holiday spending owing to the rising cost of living and sales are already declining significantly in inflation-adjusted terms.

Additionally, GBPJPY’s inactivity may be explained by reports that UK Chancellor Jeremy Hunt is about to make an announcement on a new tax on inheritance, according to the UK Telegraph.

The news also said that it is believed that Chancellor Hunt and Prime Minister (PM) Rishi Sunak agreed to freeze the tax-payment threshold for an additional two years.

On the other hand, talk of probable gains from the next fiscal plan and UK Prime Minister (PM) Rishi Sunak’s attempts to defend his election kept pair buyers upbeat. According to The Telegraph, UK Prime Minister Sunak is prepared to make a significant gas announcement with America following the Cop27 climate change meeting. 

It’s important to note that the GBPJPY pair’s movements are constrained by the Bank of Japan’s (BOJ) bond-buying activities, worries about China’s increasing covid counts since April, a light schedule, and concerns about these factors.

Moving on, a lack of significant data or events may keep the quotation dormant, but confidence over UK fiscal plans may help the cross-currency pair to hold stronger before the UK releases its third-quarter GDP figures on Friday.

Bulls in the GBPJPY attempt to break over the 10-DMA barrier at 169.00, but sellers are kept upbeat by the bearish MACD signals and stable RSI.