• GBP/JPY has reacted much to the upbeat Japanese employment data.
• Japan’s jobless rate has matched the expectations at 2.5% while Job/Applicants has improved to 1.32.
• UK Truss is closely working with the BOE to stabilize financial markets.

The GBP/JPY pair dropped below 161.00 in the early Tokyo session after failing to sustain above the same. The intermittent hurdles seem to lack strength and will fade sooner just after the market participants will jump to capitalize on the minor correction.

Meanwhile, an upbeat Japan’s employment data has not made much impact on the cross.  The Unemployment Rate has remained in line with the estimates of 2.5% but lower than the prior release of 2.6%. While the Jobs/Applicants Ratio has improved to 1.32 vs. the projections of 1.30. 

This week, the cross has displayed a juggernaut rally from a low of 148.57 after the Bank of Japan (BOJ) announced an unscheduled bond-buying program.

The BOJ sees the necessity of infusing liquidity into the economy as the nation has still not revived from the consequences of the Covid-19 pandemic. Investors have been dumping the Japanese yen for a prolonged period amid its ultra-dovish monetary policy and now more leakage of liquidity has vanished after the impact of BOJ’s intervention in the currency markets. It seems that only a ‘neutral’ stance on interest rates could save the yen from further carnage.

On the UK front, the Bank of England (BOE) also announced a surprise bond-purchase program to stabilize financial markets. A 13-day bond-buying program has been announced in which the BOE will purchase GBP 5 billion worth of long-dated bonds each day. The surprise BOE move has still kept it solid against the yen bulls.

On Thursday, UK PM Liz Truss cited that they are working closely with the Bank of England. "We have seen difficult markets around the world, I am clear that the government has done the right thing,", as reported by Reuters.

In today’s session, the UK Gross Domestic Product (GDP) data will be of utmost importance. The annual and quarterly data is expected to remain steady at 2.9% and -0.1% respectively.