GBP/JPY declines after facing barricades around 165.00, BOE Bailey’s speech eyed

• GBP/JPY has slipped sharply after facing hurdles around 165.00 ahead of BOE Bailey’s speech.
• Truss’s relief packages may return consumers’ confidence in the economy.
• BOJ’s prudent policy has failed to step up the households’ demand.

The GBP/JPY pair has witnessed a steep fall after sensing selling interest around the round-level resistance of 165.00. The asset attempted to overstep the critical resistance of 165.00 for the second time with a lack of strength, which resulted in a significant fall. On a broader note, the asset has remained in the grip of bulls after safeguarding the pound bulls from the downside move below 161.00.

Liz Truss's win for the next UK Prime Minister has brought political stability to the UK economy. Apart from that, new relief packages to safeguard households from higher energy bills, lower employment opportunities, and higher payouts for similar consumption due to price pressures are returning the confidence of consumers in the economy.

The Cabinet has announced a fund of 130 billion pounds for freezing bills. Under this, the new cabinet will set a fixed unit price for energy suppliers to sell gas & electricity to households.

And, now Truss will cut taxes for households, which will remain supportive to combat higher payouts. Apart from that, the Cabinet will focus on making more investments and scaling up the employment generation process.

In addition to that, the speech from Bank of England (BOE) Governor Andrew Bailey will remain in focus. BOE’s Bailey will dictate the likely monetary policy action, scheduled for September 15.

On the Tokyo front, the weaker spending pattern of the households is impacting the yen bulls. Tuesday’s Overall Household Spending data remained lower at 3.4% against the expectations and the prior release of 4.2% and 3.5%. It seems that the ultra-dovish monetary policy by the Bank of Japan (BOJ) is failing to make any serious impact on the slowdown prospects.