GBPJPY was 0.30% lower on the day after improved industrial production and retail sales data from the Japanese economy. Industrial production was still at a disappointing -13.3% but this was better than the -15.5% expected by analysts.
Retail sales were also negative but they also defied economist’s expectations with a -1.3% print versus -3.5%. The pound saw a slight improvement to finalized GDP figures for the second quarter and this is the reason for the muted response in the pair.
Policymakers from the Bank of England meet later and Andrew Haldane will give a speech so this could have an effect on the pound. Sterling was boosted in recent sessions after the BoE’s Dave Ramsden suggested that 0.1% interest rates were the likely lower bound for the U.K. economy. This went against earlier Monetary Policy meeting minutes, which suggested that the bank had discussed negative rates with a view to employing them by year-end.
On the Brexit front, the EU’s chief negotiator Michel Barnier has praised an improved “buzz” in talks between the two parties aiming to secure a post-Brexit trade deal. The controversial Internal Markets Bill passed a third reading in Parliament with a vote majority of 84. The bill aims to protect free trade between British nations after the transition period ends. The bill has received criticism for altering the original EU agreement.
GBPJPY was lower on the day after a recent bounce from the 134.00 support level. This will be an important level in the days ahead. A close below this level will signal further losses ahead, but if buyers show up again the pair will probably take out the 136.00 level and seek to move higher. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
