GBP/JPY consolidates in a range around mid-182.00s ahead of UK wage figures

• GBP/JPY is seen oscillating in a narrow trading band during the Asian session on Tuesday.
• Traders now await the release of the UK wage growth data for some meaningful impetus.
• The BoJ’s dovish stance might continue to undermine the JPY and lend support to the cross.

The GBP/JPY cross struggles to capitalize on the previous day's goodish intraday recovery of over 150 pips from the 181.15 area, or over a one-week low and oscillates in a narrow range during the Asian session on Tuesday. Spot prices currently trade just above mid-182.00s as traders now look to the UK wage growth data for a fresh impetus.

UK Average Earnings Excluding Bonuses is anticipated to rise by 7.8% YoY rate during the three months to August, matching the previous month's reading. Meanwhile, the gauge including bonuses is seen declining from 8.5% to 8.3% during the reported period. A stronger-than-expected report might fuel concerns about inflationary pressures and revive bets for further policy tightening by the Bank of England (BoE), which, in turn, should provide a strong boost to the British Pound (GBP) and the GBP/JPY cross.

Conversely, a softer print will reaffirm expectations that the BoE will maintain the status quo in November, though the immediate market reaction is more likely to be limited. The Bank of Japan (BoJ) sticks to its view that inflation is transient and has no plans to phase out its massive monetary stimulus. The dovish outlook, along with a generally positive risk tone, might continue to undermine the safe-haven Japanese Yen (JPY), suggesting that the path of least resistance for the GBP/JPY cross remains to the upside.

That said, speculations that Japanese authorities will intervene in the foreign exchange market to support the domestic currency might hold back traders from placing aggressive bullish bets. Traders might also prefer to wait on the sidelines ahead of the UK consumer inflation figures on Wednesday, which will play a key role in influencing expectations of the BoE's next policy move. Nevertheless, the aforementioned fundamental backdrop supports prospects for some meaningful appreciating move for the GBP/JPY cross.

Technical levels to watch