GBP/JPY MAY KISS 153.00 ON EASING WAR TENSIONS BETWEEN RUSSIA AND UKRAINE

• GBP/JPY has rebounded on the improved risk appetite of investors.
• Britain will phase out Russian oil demand by the end of 2022.
• UK region will report GDP, Industrial Production, and Manufacturing Production data on Friday.

The GBP/JPY pair extended its gains on Wednesday after auctioning in a range of 151.00-152.24. In the early Asian session, the cross is trading lackluster but is likely to resume rallying higher on reversal in the market sentiment. The risk appetite of investors improved significantly after President Volodymyr Zelenskyy agreed on a diplomatic solution.

Earlier, Russia was demanding a withdrawal of membership applications by Ukraine from NATO. In addition to that, two pro-Russian regions in eastern Ukraine were recognized as ‘independent’ by Russian leader Vladimir Putin before the invasion of Ukraine. On that, Zelenskyy is ready to compromise but also wants that the Kremlin needs to make some compromises too. The initiative of a ceasefire between the nations has underpinned the risk-sensitive assets.

The pound was underperforming on the prohibition of Russian oil imports. British economy announced that it will phase out Russian oil requirements by the end of 2022. This had created havoc for pound bulls as the British imports a decent amount of oil and energy from Russia and shuffling suppliers in one almost nine months is not a cakewalk.

The Japanese yen has also been hammered against the pound on poor Gross Domestic Product (GDP) numbers released by the Japanese Cabinet Office on Wednesday. Japan’s quarterly GDP came in at 1.1%, much lower than the market estimates of 1.4% and previous print 1.3%. While the yearly GDP data slipped heavily to 4.6% from the market consensus and prior figures of 5.6% and 5.4% respectively.

Now, investors will focus on GDP numbers, Industrial Production, and Manufacturing Production data from the UK, which will release on Friday. While Tokyo will report the Overall Household Spending data on Thursday.