GBP/JPY rises to four-day top near 133.00 after BOJ Summary of Opinions
- GBP/JPY remains on the front foot for the third day in a row.
- UK PM Johnson’s guidelines on lockdown offered early-day push to the pair.
- BOJ Summary of Opinions flashes downbeat signals for the Japanese economy.
- Trade/virus flash mixed messages, risk-tone mostly positive.
GBP/JPY takes the bids to 132.74, near the four-day high of 132.79 flashed recently, amid the initial Tokyo session on Monday. The pair earlier cheered UK PM Johnson’s guidelines on lockdown exit while BOJ Summary of Opinions offered the latest push towards the north.
In his guidelines to exit the coronavirus (COVID-19) led lockdown, UK PM Boris Johnson emphasized to restore the working group. He mentioned, “from Monday, those who cannot work from home will be actively encouraged to go to work - but avoid public transport. Also, from Wednesday people will be allowed to take unlimited amounts of outdoor exercise as long as they adhere to social distancing guidelines. It should, however, be noted that the Tory leader also hoped the next step "at the earliest by 1 June" would be for some primary pupils to return to school in England.
Considering the BOJ’s statement concerning Summary of Opinions, policymakers seem to remain worried and cited downside risks for the Asian giant. Though, the policymakers also said that short-term slump blamed on pandemic may not necessarily determine the medium-, long-term path of Japan's economy. Japan's economy likely to improve, see prices pick up once pandemic subsides.
Elsewhere, US President Donald Trump keep alleging China for the virus outbreak while the diplomats from the Trump administration agreed with the Chinese counterpart to communicate and cooperate.
Further, some of the top White House members are self-isolating, not VP Mike Pence as earlier said, which in turn suggests virus spreading in the key US body and may heavy the risks.
Even so, the US 10-year Treasury yields rise 1.5 basis points to 0.696% whereas Japan’ NIKKEI rise over 1.13% to 20,410 by the press time.
Given the lack of major data/events, the pair traders may keep eyes on the trade/virus updates while the start of the EU-UK Brexit talks may also direct near-term moves of the quote.
Technical analysis
A confluence of 21-day and 50-day SMAs near 133.20/30 acts as the near-term key while a three-week-old falling trend line near 130.40, as well as 130.00 round-figure, can limit the pair’s short-term declines.