Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

The GBP/JPY currency pair surged over 0.5% on Tuesday, after the Bank of Japan took a small step towards discontinuing the years-long substantial monetary stimulus. The move came well short of expectations of some market players who had anticipated a larger policy tweak.

The BoJ left its benchmark short-term interest rate without change at -0.10% at its October policy meeting and also kept a 0% cap on 10-year bond yields set under its yield curve control policy.

Yet, the BoJ redefined 1% as a loose “upper bound” rather than a hard cap and also dropped a pledge to defend that level with offers to buy unlimited amount of bonds.

The long-term interest rate cap of 1% was adopted in July.

“The 1% is no longer a strict cap and so that means they will allow for JGB yields to rise above 1%. To some extent, this is as good as quietly allowing YCC to fade in the background,” Christopher Wong, currency strategist at OCBC, was quoted as saying by Reuters.

Meanwhile, in its quarterly outlook report, the central bank revised up its inflation forecast for this year to 2.8% from 1.3% previously, which exceeded its 2% inflation target.

As of 8:06 GMT on Tuesday GBP/JPY was gaining 0.73% to trade at 182.677. The minor pair rebounded from a fresh three-week low of 180.762, which it registered on Monday.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Walt Disney shares close lower on Tuesday, company to dismiss nearly 28,000 employees at US theme parks due to pandemic impactWalt Disney shares close lower on Tuesday, company to dismiss nearly 28,000 employees at US theme parks due to pandemic impact Walt Disney Co announced on Tuesday that nearly 28,000 employees at its US theme parks would be laid off, most notably in California where Disneyland is still closed, as the COVID-19 pandemic has delivered a severe hit to overall visitor […]
  • Commodities trading outlook: gold, silver and copper futuresCommodities trading outlook: gold, silver and copper futures Gold prices were lower during midday trade in Europe today, as investors assessed worse-than-expected EU economic figures. Meanwhile, copper futures also declined, in light of slowing EU growth.Gold futures for delivery in December on the […]
  • Verizon and Intel near deal over OnCue serviceVerizon and Intel near deal over OnCue service Verizon Communications Inc. seems to be near an agreement to purchase the Internet-based pay-TV startup of Intel Corp. The company has not made an official announcement yet, because the negotiations are not public, but the deal is expected to […]
  • EUR/USD on five-week lowsEUR/USD on five-week lows The euro slid to the lowest point in five weeks against the US dollar on Tuesday, despite the positive Euro zone PMI data, as market sentiment received a boost after the upbeat Chinese manufacturing data, which suggested a positive view over […]
  • Forex Market: NZD/USD daily forecastForex Market: NZD/USD daily forecast During yesterday’s trading session NZD/USD traded within the range of 0.8547-0.8636 and closed at 0.8570.At 10:59 GMT today NZD/USD was gaining 0.29% for the day to trade at 0.8589. The pair touched a daily high at 0.8593 at 10:40 […]
  • Coca-Cola share price up, to axe jobs under cost-cutting planCoca-Cola share price up, to axe jobs under cost-cutting plan Coca-Cola Co intends to trim its workforce by at least 1 000 to 2 000 employees globally in line with its cost-cutting $3-billion plan announced in October, after the beverage maker posted disappointing results for the third quarter.Under […]