GBP/JPY eyes more downside below 164.00 despite soaring hawkish BoE bets

• GBP/JPY is eyeing more weakness below 164.00 amid a decent UK economic outlook.
• UK business sentiment improved as political turmoil and inflationary pressures showed some signs of easing.
• A positive contribution to Japan’s inflation through international forces would only create troubles for BoJ policymakers.

The GBP/JPY pair looks vulnerable above the immediate cushion of 164.00 in the Tokyo session. The cross is struggling to firm its feet despite the Bank of England (BoE) is likely to continue its quantitative restrictive program to tame galloping inflation.

BoE policymakers considered the rebound in February’s inflation a one-time thing and anticipated that inflation will drop below 4% by the end of this year as energy costs fall, however, the booming economic outlook is telling a different story. Reuters reported on Tuesday that the British Chambers of Commerce (BCC) said, Most British businesses expect their sales to rise over the coming year - an improvement from late 2022 - despite seeing no sales growth over the past three months.

BCC further that, “After a slump in business confidence in the second half of 2022, business sentiment improved as political turmoil and inflationary pressures showed some signs of easing.”

Meanwhile, BoE Chief Economist Huw Pill said on Tuesday that caution is still needed in assessing inflation prospects on account of the potential persistence of domestically generated inflation, as reported by Reuters. He further added, "Wage developments, particularly higher frequency indicators of current momentum, appear to be easing."

On the Tokyo front, the Japanese Yen has remained subdued amid rising oil prices. This would step-up Japan’s inflation ahead, however, a positive contribution to Japan’s inflation through international forces would only create troubles for Bank of Japan (BoJ) policymakers.