GBP/JPY continues march higher as Yen continues to deflate, tests above 200.00

• GBP/JPY rose back above 200.00 as Yen weakness remains.
• BoJ statements bought little reprieve from broad-market Yen selling.
• Japanese Tokyo CPI inflation due later this week.

GBP/JPY rose again on Monday, climbing back above the key 200.00 handle as broad-market Yen selling continues to batter the JPY. Bank of Japan (BoJ) policymakers, including BoJ Governor Kazuo Ueda and BoJ Deputy Governor Shinichi Uchida, found very little traction in markets, and a reprieve in Yen short pressure was brief in early Monday trading.

The UK economic calendar is quiet this week, with strictly low-tier figures on the offering. Yen traders will pivot in the late-week to focus on Japanese Tokyo Consumer Price Index (CPI) inflation figures. YoY headline Tokyo CPI inflation last printed at 1.8% in April, with Core Tokyo CPI inflation coming in at 1.6%. Median market forecasts currently expect May’s Core Tokyo CPI inflation to bounce to 1.9%. Tokyo CPI inflation will print early Friday.

GBP/JPY technical outlook

The Guppy continues to march up the charts and the pair is threatening to break into fresh multi-decade highs above 200.60, a level reached in late April. The pair fell to a near-term low below 192.00 after a set of suspected “Yenterventions”, but broad-market Yen weakness continues unabated. GBP/JPY has gained ground in all but three of the last 15 consecutive trading days.

GBP/JPY hourly chart

GBP/JPY daily chart