GBP/JPY declines to near 190.10 on news of BoJ lifting negative rates in March

Source Fxstreet
  • GBP/JPY depreciates on news about BoJ to lift negative interest rates in March’s meeting.
  • UK Chancellor Jeremy Hunt is anticipated to announce a reduction in national insurance contributions.
  • Traders will observe the S&P Global/CIPS Construction PMI for February on Wednesday.

GBP/JPY depreciates to near 190.10 during the early European hours on Wednesday. The Japanese Yen (JPY) received a boost after reports from Jiji Press suggested that some attendees of the upcoming Bank of Japan (BoJ) policy meeting on March 19 may advocate for "lifting negative interest rates," which undermines the GBP/JPY cross.

BoJ Governor Kazuo Ueda has expressed skepticism about the sustainability of Japanese inflation reaching the 2% target. With the unexpected possibility of a recession, the BoJ may delay its plans for monetary policy tightening. According to Reuters, an unnamed source indicates that the BoJ is likely to maintain its forecast for a moderate economic recovery but may revise its assessment of consumption and factory output at the March meeting.

The release of data on Tuesday indicated a rebound in the Tokyo Consumer Price Index (CPI) from a 22-month low in February. This development has reignited discussions about the possibility of the Bank of Japan (BoJ) exiting the negative interest rates regime, which in turn has provided a boost to the Japanese Yen.

The Pound Sterling (GBP) strengthens in anticipation of the UK Chancellor Jeremy Hunt's Budget Report scheduled for Wednesday. Hunt is expected to present the government's fiscal agenda, detailing tax and spending plans. There is speculation that he may announce a reduction in national insurance contributions for employees, similar to the 2p reduction announced in the autumn statement.

UK’s BRC Like-For-Like Retail Sales (YoY) for February disappointed, registering a figure of 1.0%, below the anticipated 1.6%. This contrasts with the previous period's 1.4%. Later today, the S&P Global/CIPS Construction PMI for February will be observed by traders to gain insights into the UK's economic activity.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Dollar holds above 100 near a 3-month high — three Fed speakers and a $69 billion auction land tonightThe dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.
Author  Suzie
Sep 22, Tue
The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Memory chips surge, Nasdaq notches a second straight record close — why the Dow fell 185 points anywayMicron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.
Author  Irene Q.
Sep 23, Wed
Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.
placeholder
Gold Price Forecast: XAU/USD drifts toward $4.300 with bears gaining tractionGold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.
Author  FXStreet
Sep 23, Wed
Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.
placeholder
US input costs rose at the fastest pace in four years — the September flash PMI beat is an inflation story, not a growth storyUS September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.
Author  Suzie
Yesterday 06: 46
US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.
Related Instrument
goTop
quote