GBP/JPY prints 0.30% intraday gains as it pokes a multi-day-old resistance line surrounding $167.60 heading into Tuesday’s European session.
In doing so, the cross-currency pair cheers the market’s risk-on mood, as well as sluggish US Treasury bond yields and the indecision over the Bank of Japan’s (BOJ) next moves.
Reuters quotes Takeo Hoshi, an academic with close ties to incumbent central bank policymakers, to mention that the Bank of Japan (BoJ) could do away with its 10-year Japanese government bond (JGB) yield cap in 2023 on increasing odds that inflation and wages will exceed expectations.
Earlier in the day, BOJ’s Kuroda mentioned that Japan has not achieved stable 2% inflation accompanied by wage rises. However, the policymaker also stated, “Once 2% inflation target is consistently met, will consider exiting ultra-loose policy.”
Hence, the BOJ policymaker’s hesitance in accepting tighter monetary policies favors the GBP/JPY buyers. The same could be linked to the recently sluggish US Treasury yields and mildly bid S&P 500 Futures.
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