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11 Mar 2014
GBP/JPY fending of supply
FXStreet (Barcelona) - GBP/JPY has picked up throughout the day after a drift to the downside overnight in Asia from above 172.00. It has been all about the Central Bank's.
Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ, Ltd noted that the BoJ maintained unchanged monetary policy at today’s policy meeting remaining committed to increasing the monetary base at an annual pace of about JPY60-70 trillion. He explained, “The BoJ continued to describe the Japanese economy as recovering “moderately”. However, the BoJ did acknowledge that the performance of Japan’s exports have been disappointing noting that exports have “recently levelled off more or less”. The BoJ also described the performance of business fixed investment and industrial production more positively. The pick up in business fixed investment was described as becoming “increasingly evident” as corporate profits improved, while industrial production was described as increasing at a “somewhat accelerated pace”. The outlook for the Japanese economy and inflation remained unchanged. The loss of economic momentum in the 2H of 2013 ahead of the implementation of sales tax in April has increased downside risks to growth and inflation in 2014 which if they materialise may prompt additional BoJ easing later this year which could provide prove a fresh catalyst to trigger further yen weakness”. He then went on to say and noted, “The pound was also undermined yesterday by comments from the BoE Deputy Governor Bean who stated that further pound strength would not be helpful for exports and desired economic rebalancing in the UK”. Today we heard from the BoE in the Inflation Report Hearing. BOE's Carney said that any BOE rate increases will be gradual and limited but went onto say that spare capacity at higher end of BOE range, explaining that QE exit should only start after several rate increases where as Weale said the level of spare capacity in UK may be overstated. There seems to be a lack of unity going on between MPC members here.
GBP/JPY Levels
The 20 DMA is 170.60, the 50 DMA is 170.40 and the 200 DMA is 160.35. RSI (14) reads 43.33. Supports are ascending from 169.65, 170.15, 170.70, 171.55. Spot is 171.82 while resistances are 172.85, 173.65, 174.85 and 175.60.
Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ, Ltd noted that the BoJ maintained unchanged monetary policy at today’s policy meeting remaining committed to increasing the monetary base at an annual pace of about JPY60-70 trillion. He explained, “The BoJ continued to describe the Japanese economy as recovering “moderately”. However, the BoJ did acknowledge that the performance of Japan’s exports have been disappointing noting that exports have “recently levelled off more or less”. The BoJ also described the performance of business fixed investment and industrial production more positively. The pick up in business fixed investment was described as becoming “increasingly evident” as corporate profits improved, while industrial production was described as increasing at a “somewhat accelerated pace”. The outlook for the Japanese economy and inflation remained unchanged. The loss of economic momentum in the 2H of 2013 ahead of the implementation of sales tax in April has increased downside risks to growth and inflation in 2014 which if they materialise may prompt additional BoJ easing later this year which could provide prove a fresh catalyst to trigger further yen weakness”. He then went on to say and noted, “The pound was also undermined yesterday by comments from the BoE Deputy Governor Bean who stated that further pound strength would not be helpful for exports and desired economic rebalancing in the UK”. Today we heard from the BoE in the Inflation Report Hearing. BOE's Carney said that any BOE rate increases will be gradual and limited but went onto say that spare capacity at higher end of BOE range, explaining that QE exit should only start after several rate increases where as Weale said the level of spare capacity in UK may be overstated. There seems to be a lack of unity going on between MPC members here.
GBP/JPY Levels
The 20 DMA is 170.60, the 50 DMA is 170.40 and the 200 DMA is 160.35. RSI (14) reads 43.33. Supports are ascending from 169.65, 170.15, 170.70, 171.55. Spot is 171.82 while resistances are 172.85, 173.65, 174.85 and 175.60.