GBP/JPY renews YTD top past 168.00 as BoJ defend easy-money policy, focus on Ueda

• GBP/JPY jumps nearly 150 pips on BoJ inaction, pierces the key technical hurdle.
• BoJ matches market forecasts with no change to monetary policy, YCC measures.
• UK Business Sentiment hits 11 months high and favors cross-currency pair buyers.
• Newly appointed Governor Ueda’s speech will be the key for immediate directions.

GBP/JPY takes the bids to refresh the yearly high around 168.15 as bulls cheer the Bank of Japan’s (BoJ) status quo during early Friday. Also underpinning the cross-currency pair’s run-up could be the technical breakout and upbeat UK sentiment data.

BoJ held benchmark interest rates unchanged at -0.10% while also defending the latest 0.50% band of the Yield Curve Control (YCC) policy, as expected. However, the BoJ also said that they will take additional easing steps without hesitation as needed while striving for market stability. With this, the market took a sigh of relief that no change is likely under the new governorship.

Also read: BOJ Quarterly Outlook Report: Uncertainty over Japan's economy extremely high

Apart from the BoJ action, a jump in the UK business confidence, per the Lloyds Bank survey for March also seemed to have propelled the GBP/JPY price. As per the latest poll, the British Business Sentiment rallied to an 11-month high of 33.0% in March versus 32.0% prior. Additionally, the survey also showed a seven-month high in wage growth, which in turn can push the Bank of England (BoE) towards being more hawkish.

As a result, the divergence between the BoJ and BoE monetary policies offers an extra boost to the GBP/JPY prices.

Furthermore, cautious optimism in the market and upbeat Treasury bond yields allow the GBP/JPY pair buyers to keep the reins as well.

To sum up, the GBP/JPY pair buyers are properly set in the driver’s seat. However, BoJ Governor Kazuo Ueda’s press conference, scheduled at 06:30 AM GMT, will be crucial to watch for clear directions.

Technical analysis

A clear upside break of the 168.00 double-top hurdle keeps GBP/JPY buyers hopeful of posting further upside towards the late 2022 peak near 169.30.