GBP/JPY gains multi-year high amid BoE hawkish bets GBPJPY Currencies
after strong labour-market and Gross Domestic Product data which supports more rate hikes. On the other hand, policy divergence seems to be weakening the Yen ahead of the Bank of Japan meeting on Friday.Along this week, labour-market data from the UK showed that unemployment decreased in the three months period to April while average earnings, including and excluding bonuses, accelerated during the same period. In addition, monthly GDP expanded by 0.
As the labour market remains robust and economic activity resilient, investors are expecting that the BoE will take a more aggressive path in its fight for inflation. In that sense, according to WIRP , the market suggests that a 25 bps hike to 4.75% is already priced in. Meanwhile, the British yields rose across the curve. The 10-year bond yield rose to 4.41%, while the 2-year yield stood at 4.93% and the 5-year yielded 4.56%, respectively.
In case the pair continues to gain traction, the following resistance line up at the 179.50 area, followed then by the psychological mark at 180.00 and the 180.50 zone. On the other hand, if the pair corrects to the downside, immediate support levels are seen at the 177.40 area, followed by the psychological mark at 175.00 and the 20-day Simple Moving Average at 174.05.
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