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GBP/JPY Forecast- British Pound Finds Buyers After Initial Selloff Against Yen

By:
Christopher Lewis
Published: Mar 28, 2023, 12:52 UTC

The British pound initially pulled back against the Japanese yen during the trading session on Tuesday, but turned around to show signs of life as buyers stepped in to pick up the market.

British Pound, FX Empire

In this article:

GBP/JPY Forecast Video for 29.03.23

British Pound vs Japanese Yen Technical Analysis

The British pound initially fell against the Japanese yen during early trading on Tuesday, as we continue to see a lot of choppy behavior in the Forex markets. It’s worth noting that the pair is highly sensitive to risk appetite, but more importantly is paying close attention to the Japanese bond markets as of late. Remember, the Bank of Japan continues its yield curve control policy, meaning that they are trying to keep the 10 year yield down to 50 basis points or lower. Currently, they do not seem to have a lot of problems doing so, but every time interest rates around the world rise, it puts a bit of pressure on the Japanese yen as they will have to print more yen to buy more bonds.

On the other hand, the British have reiterated their need to fight inflation and not worry so much about the banking crisis. In other words, they are going to continue to be tight with monetary policy, and therefore it’s likely that the British pound will continue to be somewhat elevated. The 200-Day EMA sits just above, and of course will attract a certain amount of attention, but at the moment it seems as if the market is going back and forth in this range, as the moving averages are essentially flat, and therefore it suggests that we don’t have any conviction one way or the other.

That being said, the market is likely that we go higher rather than lower, as long as the trendline stays intact. That’s all the way down at the ¥157.50 level, so we are a long way from breaking the trend in general. That being said, the market is likely to see a lot of noise above, so I think the market is going to be one that you have to look at through the prism of range bound trading, as there are a lot of questions as to what the economic health of the world is at the moment. The ¥165 level above looks to be like a hard ceiling also, so pay attention to that.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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