• GBP/JPY remains sidelined at the highest levels since January 2016.
• UK statistics came in mixed, GDP improves for April.
• Market’s consolidation ahead of Fed, mixed concerns about BoJ vs. BoE prod pair buyers.

GBP/JPY clings to minor losses around 176.70-80 as it pays little heed to the UK statistics amid early Wednesday morning in London. In doing so, the cross-currency pair consolidates the biggest daily jump in 1.5 months while making rounds to the highest levels since January 2016 marked the previous day.

Anxiety ahead of the Federal Reserve’s (Fed) monetary policy announcements and a light calendar in Asia allows the GBP/JPY bulls to catch a breather amid the early hours of the key day. Additionally, the mixed nature of the British data and lackluster Treasury bond yields also restrict the pair’s latest moves.

Talking about the UK statistics, the headline Gross Domestic Product (GDP) for April matches 0.2% growth versus -0.3% prior while the Industrial Production slumps during the stated month. That said, the Industrial Production also disappoints and so do the Index of Services for three months to April. 

Also read: UK GDP expands 0.2% MoM in April vs. 0.2% expected

It should be observed that the British job numbers and inflation data have previously propelled the hawkish concerns about the Bank of England (BoE), which in turn keeps the British Pound (GBP) buyers hopeful despite the recently mixed UK data.

On the other hand, Japanese inflation numbers have been improving lately but the Bank of Japan (BoJ) officials keep defending the ultra-easy monetary policy meeting. Also likely to propel the GBP/JPY pair is a looming multi-billion-dollar worth of bond issue from the US Treasury Department due to the US debt-ceiling deal.

That said, the US 10-year Treasury bond yields retreat from the 13-day high of 3.83% to 3.80% whereas the two-year counterpart poked the highest levels in three months with the 4.70% mark before easing to 4.66% at the latest, which in turn checked the GBP/JPY bulls.

Moving on, GBP/JPY may stay on the front foot amid the BoE versus BoJ divergence but fears about the UK’s economic transition may allow the quote to witness intermediate jitters.

Technical analysis

A daily closing beyond the previous resistance line from April 2022, near 176.50 by the press time, keeps the GBP/JPY pair buyers hopeful of meeting the 180.00 psychological magnet.