GBP/JPY climbs as Yen gives back recent gains, testing 184.00 region

• The GBP/JPY is extending into a recovery from last week’s downside plunge.
• Japan, UK data smattering the economic calendar ahead of Thursday’s BoE rate call.
• Japan manufacturing, UK manufacturing & employment figures due heading into the mid-week.

The GBP/JPY is paring back recent losses sparked by a bull run in market Japanese Yen (JPY) bets after the Bank of Japan (BoJ) leaned unusually hawkish last week. The broader market has since started pulling back on premature Yen bets, giving the Pound Sterling (GBP) a chance to get up off the floor.

UK labor data is slated for Tuesday, with Wednesday seeing an early showing of Japanese manufacturing as well as UK Gross Domestic Product (GDP) and Manufacturing Production. 

UK Claimant Count Change is forecast to show an increase in new jobless benefits seekers from 17.8K to 20.3K for November, With the ILO Unemployment Rate seen holding flat at 4.2%, while the Japanese Tankan Large Manufacturing Index for the fourth quarter is expected to improve from 9.0 to 10.0 compared to the third quarter.

Thursday brings the week’s heavy-hitter for the GBP in the Bank of England’s last rate call for 2023. Markets broadly expect the BoE to hold flat on interest rates at 5.25%, but investors will be taking a deep-dive on the BoE’s Monetary Policy Report, where traders will be looking to sniff out the extend to which the BoE is leaning hawkish or bearish heading into the first quarter of 2024.

GBP/JPY Technical Outlook

The GBP/JPY is up over 5% from last week’s plunge into 178.58, but the pair is still down 2.65% from November’s late peak of 188.66. The 50-day Simple Moving Average (SMA) is holding bids to the midrange, with long-term moves catching chart support from the 200-day SMA rising into 178.00.

The 180.00 major handle has propped up the Guppy since the pair climbed over the key level back in June, providing long-term technical support as the GBP/JPY continues to press into the high end despite near-term downside weakness.

GBP/JPY Daily Chart

GBP/JPY Technical Levels