GBP/JPY tumbles to kick off Asia trading, halts decline at 147.50
The Yen plowed ahead in the early Tokyo session as the week's flight to safety theme continues into Friday's trading. The GBP/JPY is testing near 147.60 after reaching a Tokyo low of 147.46. The pair traded roughly on Thursday as traders struggled to make up their minds, and renewed risk aversion in the Tokyo session has knocked the pair back to yesterday's low.
This week has been a tumultuous affair with tariffs sparking fears of a global trade war and an ongoing government scandal in the Japanese government. The sale of government land at a steep discount to a school operator with ties to the Japanese Prime Minister Shinzo Abe and his wife has reached a new low following revelations that PM Abe was aware of altered documents at least six days before the government admitted the scandal to the public. Opposition party members within Japan's parliament are decrying Abe, claiming he tried to cover-up the Financial Ministries actions related to the land sale. Further information is expected on the matter when the Japanese parliament sits down to debate the scandal at some point in the near future.
The Sterling has been faring well in March against the Yen, with a sunny economic outlook for the UK's budding economy and an expectation that the Bank of England (BoE) will begin lifting interest rates soon. However, risks remain for the GBP/JPY pair as the constant threat of souring market sentiment still challenges bullish moves as the Yen remains the broader market's favourite safe haven to pile into.
Today's drop in the Tokyo session sees the GBP/JPY set up for a third straight day of declines, and the pair is currently trading back underneath the 200-day SMA, and the declining 34-day EMA is acting as resistance from 149.20. A bullish challenge will have to clear intraday resistance at today's current high of 148.20, while immediate support sits at yesterday's low of 147.45, and last week's swing low of 136.38 further below.