- GBP/JPY records a fresh yearly high on Wednesday in the Asian trading hours.
- The cross-currency pair surges above 158.00 in the October series.
- Japan’s trade data, hawkish BOE, and Brexit headlines sum up the price action.
GBP/JPY continues to extend its previous session’s gain on Wednesday. The pair stays in a narrow trade band after hitting a fresh yearly high near 158.30. At the time of writing, the GBP/JPY pair is trading at 158.05 up 0.20% for the day.
The British pound rose against its peers on Wednesday following a hawkish tone from the Bank of England (BOE). Investors remain invested in GBP amid a broadly supportive global sentiment backdrop and an expectation of higher UK interest rates. BOE Governor Andrew Bailey said on Sunday ‘“will have to act” to keep a lid on pricing pressures. Nevertheless, supply constraints and tight labor conditions could limit the gains for the sterling.
Furthermore, the UK’s Prime Minister Boris Johnson sounds optimistic, noting that job losses and disruptions to capital flows have been lower than feared post-Brexit, per Bloomberg.
Meanwhile, the S&P 500 Futures are trading at 4,509 with 0.03% losses.
On the other hand, the Japanese yen remained on the backfoot amid monetary policy divergence. While most of the major banks talk about reducing the stimulus in the economy, the Bank of Japan (BOJ) maintains its ultra-accommodative policy stance amid a depressing growth and inflation scenario in the country.
As for now, investors are waiting for the UK Consumer Price Index (CPI) and Producer Price Index (PPI) to take fresh trading impetus.
