GBP/JPY Is Testing 157.00 Price Level Despite Rate Increase by BOE and as BOJ’s Policy Remains Unchanged

GBP/JPY is being sold and bought in a tight gap between 156.7-157.22 from Friday even though the Bank of Japan is maintaining a constant interest rate at -0.1 percent. The pair has displayed a controlled performance during the Asian session despite the Bank of Japan featuring an unbiased position on the monetary policy looking at the capped inflation figures.

The Bank of Japan policymakers took an unbiased position after the release of the country’s CPI (Consumer Price Index) which is 0.9 percent, and it is below the upside cap of 2 percent. The Bank of Japan is maintaining its unchanged position since 2016 amid corned inflation figures.

More Factors and Likely Implications
It is important to note that amide more weakness in the JPY (Japanese Yen), the GBP/JPY has been unable to give any good performance. Furthermore, the BOE (Bank of England) increased its interest rates by 25 bps for the third consecutive time. To subdue the fast-paced inflation, the Bank of England is raising its interest rate.

Following the aftermath of monetary policy proclamations by the two countries, investors will keep an eye on the news emanating from the war between Russia and Ukraine. The president of the United States of America; Joe Biden will be meeting with its NATO allies in Brussels on Thursdays to talk about providing a diplomatic solution to the struggle between Russia and Ukraine.

Furthermore, Biden will as well be meeting with the European Union on that same day. The European Union declared that it will think about placing an embargo on Russian oil imports following the meeting with the US president. This is likely to cause bigger uncertainty in the oil market and from now on the Pound Sterling will be affected because of its high dependency on ail imports from Russia.

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