GBP/JPY erodes 150-pips post JP-stimulus announcement

The cross in the GBP/JPY wiped-gains and fell sharply in the red zone, as the pound was heavily solid-off into sharp yen appreciation after Japan’s government officially announced stimulus package in a bid to revive economic growth.

GBP/JPY dragged by a stronger yen

Currently, GBP/JPY now trades -0.53% lower at 134.25, hovering within a striking distance of three-week lows struck at 134.07. The yen picked-up significant strength across the board after the Japanese government finally confirmed JPY 28 trillion economic stimulus package this Tuesday, although the figure disappointed markets expectations of more than 28 trln yen stimulus.

The cross manages to hold above 134 handle, largely on the back of moderate gains seen in the cable, with the prices flirting with 1.32 handle heading into the UK construction PMI report due to be published shortly.

GBP/JPY Levels to consider 

The pair has an immediate resistance at 135.23 (daily pivot), above which 136 (round number/ daily R1) would be tested. On the flip side, support is seen at 134 (round figure) that at 133.39 (daily S2).