GBP/JPY recovers from 160.00 as the BOJ blames rising commodity prices for the yen’s weakness

The GBP/JPY pair has received some considerable offers at 159.50 amid widespread selling in the Japanese yen as a result of the Bank of Japan’s unlimited bond-purchase program me (BOJ). The cross is soaring, having risen over 0.7 percent on Friday from its previous close at the time of publication.

After the completion of the four-day bond-buying spree on Thursday, the aftereffects of the excessive purchase of Japanese Government Bonds (JGBs) to cap yields at 25 basis points appear to be gone. It appears that market players were waiting for the conclusion of JGB distribution from market participants to the BOJ, and that the pullback was just a result of investors capitalizing on a firmer rally.

According to Japan’s Chief Cabinet Secretary Matsuno, the economy is improving, according to the BOJ Tankan survey, although difficulties from the Covid-19 outbreak linger. Furthermore, BOJ officials have stressed growing commodity costs, indicating that Japanese firms have primarily highlighted the impact of rising raw material prices and part shortages on present business circumstances.
Meanwhile, the pound has been supported against the yen by the UK’s GDP’s strong performance (GDP). On Thursday, the quarterly GDP came in at 1.3 percent higher than the market consensus and previous number of 1%. While the annual GDP was recorded at 6.6 percent, this was marginally higher than the street estimate and prior print of 6.5 percent.