GBP/JPY struggles around 170.00 as focus shifts to BOJ policy
- GBP/JPY is facing hurdles in reclaiming 170.00 ahead of BOJ policy.
- The BOJ may continue its ultra-dovish tone along with some stimulus measures.
- UK Chancellor Jeremy Hunt has postponed the medium-term fiscal plan to November 17.
The GBP/JPY has slipped below the psychological support of 170.00 and is struggling to reclaim the same in the Tokyo session. Broadly, the cross is displaying a lackluster performance as investors are awaiting the release of the monetary policy by the Bank of Japan (BOJ) for making informed decisions.
On Wednesday, the asset failed to deliver an impulsive rally despite smashing the critical resistance of 170.00. Evidence of exhaustion is visible in the cross in spite of an upbeat market mood.
Going forward, the interest rate decision by the Bank of Japan (BOJ) will remain in focus. As price growth has remained subdued and external demand shocks are escalating, BOJ Governor Haruhiko Kuroda may continue a soft tone on monetary policy.
Meanwhile, Japanese officials are planning to release more stimulus to the economy to spurt the overall demand. Japan’s Finance Minister Shunichi Suzuki said that “tomorrow, a stimulus package will be decided.” Japan’s national broadcaster, NHK, reported that a stimulus package of more than JPY29 trillion is in consideration.
On the UK front, the appointment of the 5th UK Prime Minister Rishi Sunak in the last six years has surprisingly infused optimism in the pound spirits.
On Wednesday, International Monetary Fund (IMF) Managing Director Kristalina Georgieva told Reuters, she expects new UK PM Sunak to steer Britain towards a path of medium-term fiscal sustainability.
Apart from that, UK Chancellor Jeremy Hunt announced a delay in the release of the medium-term fiscal plan, which will go air on November 17 now. He believes that the fiscal plan will display that debt is falling over the medium term. And, cited economic stability and restoring confidence as their foremost priority.