GBP/JPY aims to recapture 161.00 as BOJ’s Kuroda sees no easy policy exit
|- GBP/JPY is approaching 161.00 as BOJ sees a continuation of easy monetary policy.
- BOJ Governor sees rising labor demand ahead and a shift in wage-setting behavior by the firms.
- The BOE needs to slow down the interest rate hike pace as households are failing to segment monthly installments.
The GBP/JPY pair has extended its gains to near 160.78 after rebounding from near the psychological resistance of 160.00 in the Asian session. The cross has gained sheer momentum as Bank of Japan (BOJ) Governor Haruhiko Kuroda is standing with the decade-long view of easy monetary policy. The asset aims to re-test a six-day high of around 161.00 as a continuation of loose policy impacts the Japanese yen.
After the decision to widen the allowance band around BOJ’s yield target, BOJ’s Governor has cleared that the decision was not meant to be a step towards an exit from ultra-loose monetary policy. BOJ Governor sees rising labor demand ahead and a shift in wage-setting behavior by the firms.
While Japan PM Fumio Kishida stated that it was premature to say whether the government and the central bank could revise a decade-old joint statement that commits the Bank of Japan (BOJ) to achieve its 2% inflation target at the earliest date possible, as reported by Reuters.
In the early Tokyo session, the Japan Statistics Bureau reported a decline in the Unemployment Rate to 2.5% vs. the expectations and the former release of 2.6%. The catalyst that has impacted the Japanese Yen is the weak Retail Sales data. The annual Retail Trade has dropped to 2.6% against the consensus of 2.8%, while the monthly Retail Trade (Nov) has contracted by 1.1% while the street was expecting a contraction of 0.2%.
On the UK front, think tanks see a slowdown in the interest rate hike by the Bank of England (BOE) as households fail to augment their monthly payments. Analysts at BBH think that the Bank of England tightening expectations may need to adjust lower after a separate consumer survey showed nearly two million UK households had failed to make at least one mortgage, rent, loan, credit card, or any other bill payment over the last month."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.