GBP/JPY sold-off into Hard Brexit fears, weakest since Nov 2016
- GBP bears remain unstoppable amid Brexit woes, GBP/JPY breaches flash crash lows.
- BOJ’s status-quo-led JPY strength also adds to the weigh on the cross.
The selling interest around the British pound remains unabated so far this Tuesday, knocking-off the GBP/JPY cross to the lowest levels since November 2016, having fallen below the January flash crash low of 131.97.
Double whammy for GBP/JPY
The cross faces a double whammy and loses almost 150-pips, with the increased risks of a no-deal Brexit weighing heavily on the pound while the strength in the Yen across the board, following the Bank of Japan’s (BOJ) no change to its monetary policy settings, exacerbates the pain in GBP/JPY.
Its widely known now that the UK PM Johnson and his team of Brexiteers are preparing for the UK’s exit from the EU on Oct 31st without a deal while the Scottish First Minister Sturgeon also believes that Johnson is heading for a no-deal Brexit, following her meeting with the UK PM.
The anxiety over a potential no-deal Brexit combined with concerns over the UK economic situation will continue to keep the pound under pressure, as the focus now shifts towards Wednesday’s Fed rate cut and Thursday’s Bank of England (BOE) monetary policy announcement for fresh trading impulse.
In the meantime, the cross may also take cues from the US-China trade updates, as the two teams resume trade talks in Shanghai later today.
GBP/JPY levels to watch