GBP/JPY trading steady near 180.00 after sinking nearly 300 pips, BoJ intervention rumored

• The GBP/JPY sank nearly 300 pips early Tuesday before rebounding to 180.00.
• Market rumors of BoJ intervention in FX markets will need to wait to be confirmed by official sources.
• The economic calendar remains practically empty for both the GBP and the JPY this week.

The GBP/JPY got completely shredded early Tuesday, plummeting nearly 300 pips inside sixty seconds to just shy of 178.00. Markets are broadly assuming that the Bank of Japan (BoJ) intervened in global currency markets in an effort to defend the Japanese Yen (JPY), but investors will need to wait for any official confirmation from government sources.

The peak-to-trough price range on the Guppy is over 1.8% on Tuesday, and the GBP/JPY is strung out at the 180.00 major handle after retracing over 50% of the rumored intervention drop. 

The economic calendar is functionally barren for the entirety of the trading week for both the Pound Sterling (GBP) and the JPY; low-tier, low-impact data dots the landscape, but the closest thing to a notable datapoint this week will be the annualized Japanese Labor Cash Earnings for August, slated for late Thursday at 23:30 GMT. Japanese labor earnings last printed at 1.3%, and a miss for wage growth could see the BoJ knocked back even further from future rate hikes as the Japanese central bank braces to see if inflation falls below their 2% target boundary.

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GBP/JPY technical outlook

The GBP/JPY has been steadily trading towards the down side despite the rumored JPY market intervention, and has fallen below the 100-day Simple Moving Average (SMA) for the first time since late March.

The Guppy is down over 3.5% from August's swing high into 186.75, and an utter lack of buying conviction in GBP market flows is set to see the GBP/JPY lose its footing and tumble into the 200-day SMA currently pushing upwards from 172.00.

GBP/JPY daily chart

GBP/JPY technical levels