• GBP/JPY has advanced on Monday in tandem with other risk-sensitive currency pairs as US equities push higher.
• Dovish BoE commentary and recent negative Russo-Ukraine war developments have failed to dent risk appetite, with GBP/JPY now at 161.00.

Dovish commentary from BoE Deputy Governor Jon Cunliffe, who said that a drop in demand through household consumption and business investment as a result of the Russo-Ukraine war will be larger than expected failed to dent GBP/JPY on Monday. The pair was last trading 0.2% higher around the 161.00 level and earlier came within a whisker of matching its highs from last Wednesday in the 161.30s. Cunliffe was the lone dissenter against a 25 bps rate hike at the BoE’s last meeting, and so market participants don’t seem surprised that he is taking a more dovish view on the economy.

Global equities are performing well on Monday, with US equities erasing pre-open indecision and now firmly on the front foot, despite concerns about recent geopolitical developments in the Russo-Ukraine war and this is lifting the risk-sensitive GBP/JPY cross. Russia’s troop pullback in the north has revealed a mountain of evidence of potential war crimes and, as a result, international pressure is mounting on the EU to implement a ban on Russian energy imports. But risk assets are for now immune and if this remains the case, then GBP/JPY could remain supported and perhaps even advance on towards the 162.00 mark.