GBP/JPY surrenders intraday gains, flirts with daily low around 157.00 mark

• GBP/JPY struggled to preserve its modest intraday gains to the 157.45 area on Thursday.
• The UK political drama acted as a headwind for the British pound and capped the upside.
• The post-US CPI USD selling bias benefitted the JPY and also contributed to the pullback.

The GBP/JPY cross surrendered a major part of its modest intraday gains and was last seen hovering near the lower end of the daily trading range, around the 157.00 mark.

The cross gained some positive traction during the early part of the trading on Thursday, though struggled to capitalize on the move and met with a fresh supply near the 157.45 region. The latest political development in the United Kingdom acted as a headwind for the British pound and capped the upside for the GBP/JPY cross.

In fact, the chances of UK Prime Minister Boris Johnson resigning are rising amid calls from within the Conservative party after an admission that he attended a lockdown-breaching party in May 2020. That said, most Tory MPs still appear determined to wait for the results of a formal investigation before taking any action.

On the other hand, the post-US CPI US dollar sell-off provided a goodish lift to the Japanese yen. This, in turn, was seen as another factor that prompted traders to unwind some of their bullish bets around the sterling and kept a lid on any meaningful upside for the GBP/JPY cross ahead of the Brexit talks on Thursday.

That said, a generally positive tone around the equity markets undermined the JPY's relative safe-haven status and helped limit deeper losses for the pair. This, in turn, warrants some caution before confirming that the GBP/JPY cross has topped out in the near term and positioning for any meaningful corrective pullback.

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