• GBP/JPY rebound from one-week low remains unconvincing for bulls.
• UK’s political, Brexit jitters join downbeat UK PMIs to keep bears hopeful.
• US Treasury yields remain firmer at five-week high.
• Light calendar keeps market’s focus on risk catalysts, recession woes are crucial.

GBP/JPY traders seek confirmation as the cross-currency pair retreats to 161.75 during Wednesday’s Asian session. In doing so, the quote fades the previous day’s rebound from the one-week low amid a sluggish session.

It’s worth noting that the GBP/JPY inaction could be linked to the pessimism surrounding the UK data.

That said, the UK’s preliminary readings of August month PMIs flashed mixed readings as the Manufacturing gauge slumped to 46.00 versus 51.1 forecasts and 52.1 prior while the Services PMI improved to 52.5 versus 52.0 expected and July’s final score of 52.6.

Also, the latest survey results from the Confederation of British Industry (CBI) of trends in British manufacturing showed that the Manufacturing Order Book Balance dropped to -7 in August, the first negative reading since April 2021, from +8 in July and +3 of market expectations.

It should be noted that the comments from ex-Chancellor Rishi Sunak, suggesting less push for the Bank of England (BOE) seemed to have eased the pressure off the GBP/JPY. “Rishi Sunak has suggested that Liz Truss would "spook" international investors if she threatened the independence of the Bank of England,” per The Guardian.

Amid these plays, US 10-year Treasury yields rose to the highest in a month, inactive at around 3.05% by the press time, whereas Wall Street benchmarks closed with mild gains.

Moving on, a light calendar keeps risk catalysts as the key directives for the GBP/JPY traders. Among them, recession woes and chatters surrounding the BOE will be important for clear directions.

Technical analysis

Repeated failures to cross the 50-DMA, around 163.15 by the press time, direct GBP/JPY bears towards an upward sloping support line from mid-May, close to 160.45 at the latest.