The GBP/JPY pair was portraying selling pressure in the early trade. The cross moved gradually lower in the initial hour and later extended its losses to near 166.45, however, some recovery has been witnessed. On a broader note, the asset is rock solid on the continuation of the ultra-loose monetary policy by the Bank of Japan (BOJ).
The June meeting minutes from the BOJ released on Wednesday dictated that the majority of the BOJ policymakers are in favor of sticking to a prudent monetary policy and injecting liquidity into the economy to support the aggregate demand. A weak yen is beneficial for increasing exports.
Although the annual inflation rate has comfortably crossed the target rate of 2%, the price pressures are mostly contaminated by healthy food and fossil fuel prices. Therefore, considering a hawkish tone on policy rates won’t be an optimal decision. Going forward, the release of the Japanese inflation will keep investors busy. As per the market consensus, the annual Japanese inflation rate is seen at 2.9%, higher than the prior print of 2.5%. While the core Consumer Price Index (CPI) may be half to 0.4%.
On the pound front, a higher inflation rate at 9.1% released on Wednesday has bolstered the odds of a 50 basis point (bps) interest rate hike by the Bank of England (BOE) in its July monetary policy. The UK economy is displaying the highest price rise rate than the other Western leaders.
In today’s session, the focus will remain on the Purchase Managers Index (PMI) figures. Japan’s Manufacturing PMI is seen at 54.4 vs. 53.3 recorded earlier. While the Services PMI may slip to 52.2 from the former figure of 52.6.
The UK’s Manufacturing PMI is seen lower at 53.7 from the prior print of 54.6. And, the Services PMI will slip to 53 vs. 53.4 prior.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.