GBP/JPY struggles to extend upside above 163.00 ahead of BoJ Ueda speech

• GBP/JPY is displaying a sideways auction ahead of the new expected Brexit deal announcement.
• The Japanese Yen is losing its stance as BoJ Ueda seems follower of BoJ Governor Kuroda.
• Japan’s CPI is non-stick despite inflation rising to multi-decade highs as price pressures are fueled by international forces.

The GBP/JPY pair is facing hurdles in stretching the upside above 163.00 in the Asian session. The cross is expected to resume upside as investors are refraining from supporting the Japanese Yen, considering the fact the Bank of Japan (BoJ) Governor Nominee Kazuo Ueda is following the footprints of the BoJ Governor Haruhiko Kuroda.

BoJ Ueda cited in his Friday speech that current monetary policy is appropriate to keep propelling inflationary pressures. Despite reaching a multi-decade high, Japan’s Consumer Price Index (CPI) is non-sticky as inflation is fueled by international forces. The reason behind the accelerating price index in Japan is the higher import prices for fuel and food, not the domestic demand and wages, which should be at the first place to support inflation.

The successor of BoJ Kuroda didn’t provide any meaningful cues about the further stretch in the Yield Curve Control (YCC), which has put investors in a dilemma. The intention of Japan’s administration was to build a game plan with a novel BoJ leader of an exit from the decade-long monetary policy. However, a dovish commentary from BoJ Ueda trimmed long-term supportive bets for the Japanese Yen.

Going forward, BoJ Ueda will also deliver a speech on Monday, which will provide more light on the vision to maintain the Japanese Yen as a strong competitor against rival currencies.

Meanwhile, the Pound Sterling has turned sideways ahead of an expected Brexit deal announcement by United Kingdom Prime Minister (PM) Rishi Sunak and European Commission (EC) President Ursula von der Leyen. "The Prime Minister wants to ensure any deal fixes the practical problems on the ground, ensures trade flows freely within the whole of the UK, safeguards Northern Ireland’s place in our Union and returns sovereignty to the people of Northern Ireland," a statement from Sunak's office said per Reuters.