GBP/JPY Forecast – British Pound Spikes Against the Japanese Yen After BOJ

GBP/JPY Forecast Video for 19.01.23

British Pound vs Japanese Yen Technical Analysis

The British pound has spiked quite drastically during the trading session on Wednesday after the Bank of Japan has reiterated its desire to participate in yield curve control, which of course means printing more yen. With that in mind, it makes quite a bit of sense that the British pound would take off, especially as the CPI numbers in the United Kingdom came out rather hot. In other words, the British pound was already strong, and with the Bank of Japan doing everything he can to keep interest rates low, makes quite a bit of sense that we have seen this move.

At this point, it’s probably going to be more or less a “buy on the dips” type of situation for short-term traders. Whether or not this can last is a completely different situation, but it’s worth paying close attention to the ¥160 level because it should end up being rather telling. If we can stay above there, then it’s more likely than not that we continue to go higher, forming a massive “W pattern” that has a measured move all the way up to the ¥166 level, which is where we melted down from previously.

Whether or not that’s going to be the case is a completely different question, but it would be worth noting that was basically when the Bank of Japan said they were going to allow rates to go from 0.25%, up to the 0.5% level. This does make a certain amount of sense, because even though they allowed rates to rise, they are still much lower than other places around the world.

For a look at all of today’s economic events, check out our economic calendar.