- A combination of factors pushed GBP/JPY higher for the second straight session on Friday.
- The risk-on mood undermined the safe-haven JPY and remained supportive of the move.
- Bulls shrugged off China’s sanction on UK entities and now look forward to UK Retail Sales.
The GBP/JPY cross continues scaling higher through the Asian session and climbed to three-day tops, around the 150.30-35 region in the last hour.
The cross built on the previous day’s strong recovery move from the vicinity of monthly lows and gained some follow-through traction for the second consecutive session on Friday. The momentum assisted the GBP/JPY cross to recover a major part of its weekly losses and was sponsored by a combination of factors.
Thursday’s upbeat US Initial Jobless Claims, along with progress on vaccination rollouts boosted investors’ confidence. The spillover effect was evident from a generally positive start of trading in the Asian equity markets, which undermined demand for the safe-haven Japanese yen and extended some support to the GBP/JPY cross.
On the other hand, the British pound benefitted from a modest US dollar profit-taking slide from multi-month tops. This was seen as another factor that provided an additional lift to the GBP/JPY cross. Bulls seemed rather unaffected by China’s move to impose sanctions on nine individuals and four organisations in the UK.
Market participants now look forward to the release of the UK monthly Retail Sales figures for March. The data will play a key role in influencing the sterling. This, along with the broader market risk sentiment, might provide some impetus to the GBP/JPY cross and assist traders to grab some short-term opportunities on the last day of the week.