• The Pound rallies with the Yen weighed by a dovish BoJ.
• The BoJ flags more easing and crushes hopes of a hawkish pivot in the near term.
• GBP/JPY shrugs off previous weakness and approaches the 184.35 resistance area.

The Pound Sterling is rallying against an ailing Yen following a dovish monetary policy statement by the Bank of Japan. The pair has pared last week's losses in a nearly 2% daily rally and is getting closer to the 184.35 resistance area.

The BoJ opens the doors to further easing

The BoJ kept its ultra-loose monetary policy unchanged, as expected, but Governor Ueda´s pledge to additional easing if necessary disappointed investors who were looking for hints of a hawkish pivot in early 2024.

The Pound bounced up strongly from the 180.00 area on the back of Ueda´s comments to reach 184.00 at the moment of writing, with Monday´s high, at 184.35 at a short distance.

The strong bullish reaction from the mentioned 180.00 has eased the immediate bearish pressure and a break above 184.35 would increase bulls´ confidence to extend gains towards 186.25 and 187.50.

On the downside, support levels are at 183.20 and 181.65 previous highs.

Technical levels to watch