GBP/JPY skids below 162.00 even as BoJ Governor Nominee Ueda defends easy money policy

• GBP/JPY takes offers to refresh intraday low during three-day losing streak.
• Japan inflation came in mixed but yields retreat from multi-day top.
• BoJ Governor Nominee Ueda praises current monetary easing.
• Brexit woes join UK workers’ strikes to weigh on the British Pound (GBP).

GBP/JPY holds lower ground near the mid-161.00s as the Japanese Yen remains firmer across the board despite the incoming Bank of Japan (BoJ) Governor Kazuo Ueda’s defense of the easy money policy.

That said, the Japanese government's nominee for the new central bank governor, Kazuo Ueda spoke in the lower house of parliament early Friday while stating that the BoJ’s current monetary easing is appropriate.

Also read: BOJ Governor nominee Ueda's comments at parliamentary hearing

Even so, the Japanese Yen gained across the board even as the Treasury bond yields retreat. The reason could be the market’s bracing for future hawkish moves.

On the other hand, the Brexit woes seem to weigh on the British Pound (GBP) and please the GBP/JPY bears. “Boris Johnson has refused to back Rishi Sunak’s Brexit deal in a major blow to Downing Street’s hopes of avoiding a eurosceptic Tory rebellion,” said The Telegraph. UK Prime Minister Rishi Sunak earlier faced criticism from the Conservatives to push for Northern Ireland (NI) trade deal with the European Union (EU).

Not only the Brexit woes but the lack of progress in the British government’s talks with the nurse union seems to also exert downside pressure on the GBP/JPY prices.

Amid these plays, the 10-year Treasury bond yields mark a three-day downtrend near 3.87% by the press time, following a run-up to refresh a three-month high.

It should be noted that the challenges to the sentiment, mainly emanating from China and Russia, seems to also act as the catalysts in the GBP/JPY pair’s downside move.

Headlines suggesting China’s readiness to supply combat drones to Russia and the US Senators’ push to halt Chinese carriers overflying Russia on US flights seem to renew the market fears. With this, the market sentiment remains dicey and the S&P 500 Futures print mild losses even as Wall Street closed with minor gains.

It’s worth mentioning that the UK’s GfK Consumer Confidence Index jumped to the 10-month high by rising seven points to -38, versus forecast of -43.

Moving ahead, a light calendar ahead of the US data emphasizes the risk catalysts for clear directions.

Technical analysis

Not only a U-turn from the 200-DMA, close to 163.35 at the latest, but a downside break of the two-week-old ascending trend line, around 163.25 by the press time, also keeps the GBP/JPY bears hopeful.