GBP/JPY dumped heavily on BOJ disappointment

The cross in the GBP/JPY witnessed wild swings over the last hour, as traders reacted to the BOJ’s further easing move, however, it left markets unimpressed.

GBP/JPY: Yen demand on the rise

Currently, GBP/JPY sinks -1.82% to 136, quickly bouncing-off a sharp dip to fresh two-week lows hit at 135.59. The GBP/JPY cross rallied as high as 139.30 levels after BOJ announced further expansion in their ETF buying, although quickly reversed the spike and dropped sharply to two-week troughs, as such a move disappointed markets’ expectations of a rate cut by the central bank. The central bank left rest of the key policy instrument unadjusted.

The cross is now consolidating the BOJ-led volatile trades around 136 handle, awaiting BOJ Head Kuroda’s press conference for further momentum. While markets virtually ignored some buying witnessed in the cable as focus remains on the BOJ’s policy action.

GBP/JPY Levels to consider 

The pair has an immediate resistance at 138 (round number), above which 138.96 (10-DMA) would be tested. On the flip side, support is seen at 135.59 (daily low) that at 135 (round figure).