S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- GBP/JPY struggles to gain any meaningful traction as modest JPY strength offsets GBP rebound.
- The initial reaction to a weaker Tokyo CPI print turns out to be short-lived amid a softer risk tone.
- Concerns about the UK’s fiscal situation and the BoE’s dovish tilt contribute to capping spot prices.
The GBP/JPY cross lacks any firm intraday directional bias on Friday and seesaws between tepid gains/minor losses, below the 200.00 psychological mark through the Asian session amid mixed cues. A modest US Dollar (USD) pullback from a three-week high benefits the British Pound (GBP) and supports spot prices, though the emergence of some buying around the Japanese Yen (JPY) caps the upside.
Meanwhile, data released earlier today showed that consumer prices in Japan’s capital city, Tokyo, rose less than expected in September. This comes on top of domestic political uncertainty and concerns about economic headwinds stemming from US tariffs, which could allow the Bank of Japan (BoJ) to delay raising interest rates. Nevertheless, investors are still pricing in the possibility of an imminent BoJ rate hike in October, which, along with a slight deterioration in the global risk sentiment, benefits the JPY’s relative safe-haven assets.
Furthermore, the GBP bulls might refrain from placing aggressive bets amid concerns over the UK’s fiscal outlook ahead of the Autumn budget in November. Moreover, the Bank of England (BoE) Governor Andrew Bailey’s dovish remarks on Wednesday, saying that there will be further reductions in the bank rate, might keep a lid on the GBP. This, in turn, makes it prudent to wait for strong follow-through buying before positioning for an extension of the GBP/JPY pair’s bounce from the vicinity of the 199.00 mark, or a two-week low touched on Monday.
