GBP/JPY marches towards 162.00 ahead of UK employment data, BOE Governor Bailey’s speech

• GBP/JPY takes the bids to refresh intraday high amid mixed sentiment.
• BOE’s double bond-buying, hopes of fiscal optimism extend corrective bounce off one-week low.
• Yields fade upside momentum even as Fedspeak, market bets favor bond sellers.
• UK jobs report, BOE’s Bailey may fail to impress buyers amid broad pessimism surrounding the UK.

GBP/JPY prints the biggest daily gains in five as traders brace for the week’s key data/events during early Tuesday. Also fueling the quote could be the sluggish yields and mixed data from Japan.

It should be noted that the Bank of England’s (BOE) doubling of the bond purchases also put a floor on the GBP/JPY prices.

The US 10-year Treasury yields remain firmer around 3.96% while its two-year counterpart snaps a four-day uptrend near 4.31% at the latest. That said, the UK’s latest employment data will be crucial for the GBP/JPY pair traders to watch for fresh impulse amid the increasing odds of the BOE’s aggressive rate hikes.

Forecasts suggest the headline Claimant Count Change to drop by 11.4K in September versus the previous addition of 6.3K. However, the ILO Unemployment Rate is likely to remain unchanged at 3.6% for the three months to September.  Also, BOE Governor Andrew Bailey’s speech shouldn’t be missed as Mr. Bailey may try to defend the latest surprise moves and may help the GBP to extend the latest rebound.

Elsewhere, Japan reported downbeat current account and trade numbers for August, which in turn weigh on the yen and propel the GBP/JPY prices.

Given the grim expectations from the UK’s data and BOE’s Bailey, the GBP/JPY pair may struggle to extend the latest recovery moves.

Technical analysis

GBP/JPY justifies the bullish Doji candlestick while bouncing off the 200-DMA, around 160.70 at the latest. The pair’s further upside, however, needs validation from a monthly resistance line near 165.35.