GBP/JPY Soars 1% Beyond 158 Handle on BOE

GBP/JPY Soars 1% Beyond 158 Handle on BOE

12 May 2016, 13:35
Roberto Jacobs
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GBP/JPY Soars 1% Beyond 158 Handle on BOE

The GBP/JPY pair climbed further to hit fresh ten-day highs after the BOE kept monetary policy unchanged, although surprised markets over its confidence over UK’s economic prospects post EU referendum.

GBP/JPY jumps 200-pips on BOE

Currently, GBP/JPY rallies 0.94% to 158.07, quickly retreat from a spike to fresh ten-day highs posted at 158.29 immediately after the BOE announcement. Despite BOE’s inaction and lower growth and inflation forecasts, the pound managed to extend gains against its American peers, largely backed by the BOE’s strong remarks on the Brexit issue. BOE’s MPC statement cited, "Whatever the outcome of the referendum and its consequences, the MPC will take whatever action is needed to ensure that inflation expectations remain well anchored and inflation returns to the target over the appropriate horizon.”

Moreover, fresh spurt of buying interest seen around the USD/JPY pair also contributed to the recent upmove in the GBP/JPY cross. Meanwhile, markets digest a flurry of crucial information from the BOE published in the last hour and now await the BOE Governor Carney’s presser for further direction on the cross.

GBP/JPY Levels to consider

The pair has an immediate resistance at 160 (round number), above which 161.94 (pre-BOJ levels) would be tested. On the flip side, support is seen at 156.66 (daily low) below that at 155.98 (May 10 Low).


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