GBP/JPY JUGGLES AROUND 157.00 DESPITE UNCHANGED BOJ’S POLICY AND RATE HIKE BY BOE

• GBP/JPY is oscillating in a narrow of 156.7-157.22 after the hangover of monetary policies.
• Investors await fresh impetus from the Russia-Ukraine war for further guidance.
• BOE has raised their interest rates by 25 basis points while BOJ kept policy rates unchanged.

The GBP/JPY is trading in a narrow of 156.7-157.22 from Friday despite the Bank of Japan (BOJ) keeping the interest rates unchanged at -0.1%. The cross has delivered a subdued performance in the Asian session despite the BOJ featuring a neutral stance on the monetary policy considering the capped inflation numbers.

The BOJ’s policymakers have taken a neutral stance after the print of Japan’s National Consumer Price Index (CPI) at 0.9%, much lower than the upside cap of 2%. The BOJ is keeping its stance unchanged since 2016 amid corned inflation numbers.

It is worth noting that amid broader weakness in the Japanese yen, the GBP/JPY has failed to deliver any decent performance. Moreover, the Bank of England has raised its interest rates by 25 basis points (bps) for the third time in a row. To contain the galloping inflation, the BOE is aggressively increasing its interest rates. Adding to that, the BOE was the first central bank in the world economy, which raised its interest rates after the Covid-19 pandemic.

After the hangover of monetary policy announcements by both of the nations, investors will keep monitoring the headlines from the Russia-Ukraine war. US President Joe Biden will meet with its NATO allies in Brussels on Thursday to discuss a diplomatic solution to Russia’s invasion of Ukraine.

Moreover, Biden will also meet with the European Union (EU) on a similar day. The EU has announced that it will consider an embargo on Russian oil imports after meeting with Biden. This may bring more uncertainty in the oil market and henceforth the pound will be impacted amid higher dependency on il imports from Russia.