GBP/JPY seesaws near multi-month low amid Brexit noise/Japan data, all eyes on BOJ

• The UK PM Johnson refrains from accepting that the government assumes no-deal Brexit as the most likely outcome.
• Japan’s June month Unemployment Rate, Jobs / Application Ratio and Industrial Production declines.
• Traders await BOJ’s quarterly Outlook Report and Governor’s speech for fresh impulse.

With the continuation of the Brexit drama, coupled with sluggish data from Japan, the GBP/JPY pair seesaws near 132.91 during early Tuesday.

The newly appointed UK Prime Minister (PM) Boris Johnson tried to win over Scottish voters by taking a U-turn from comments by his most senior no-deal Brexit planning minister, Michael Gove, as he claims that the Government isn’t working on the basis that a no-deal Brexit is the most likely outcome this autumn, as per the Guardian.

Earlier on Monday, Brexit pessimism took the British Pound (GBP) to the south as news was making rounds that the British PM insists removing Irish backstop issue from the deal to sit face-to-face with the EU policymakers for any discussions. The EU lawmakers, on the other hand, kept avoiding a re-open to the previously discussed deal.

During the initial Asian session, Japan’s June month Unemployment Rate, Jobs / Application Ratio and Industrial Production data were released. While the job indicators slipped from 2.4% and 1.62 respective market consensus to 2.3% and 1.61, Industrial Production also weakened to -4.1% and -3.6% versus -1.6% and -2.0% respective forecasts for YoY and MoM.

Investors may now keep an eye over the monetary policy meeting by the Bank of Japan (BOJ). Given the inclusion of the second-quarter economic outlook and the Governor’s speech, the event gains extra importance. Latest data from Japan haven’t been too pessimistic whereas Prime Minister Shinzo Abe’s political dominance and extended support for October sales tax hike can keep anchoring the BOJ to easy monetary policy, which in turn may weaken the Japanese Yen (JPY). Though, the comparative strength of the Japanese currency and its safe-haven appeal might limit the downside.

Technical Analysis

Unless clearing 133.95 – 134.00 area including mid-month lows, the pair is less likely to regain its +135.00 status. As a result, January low close to 131.80 will remain on sellers’ radar.