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Yen strengthens versus pound on suspected Japan intervention
GBP/JPY fell more than 500 pips after a reported large-scale USD-selling, JPY-buying intervention of up to $59.0 billion.
GBP/JPY extended its decline as speculation about Japanese currency intervention lifted the yen broadly, pushing the cross further away from a multi-year high of 219.16 reached earlier this month, according to FXStreet. FXStreet cited a Reuters report, quoting a market source, that Japan likely carried out large-scale US dollar-selling and yen-buying intervention worth as much as $58.97 billion during Thursday’s American trading hours. The reported action triggered a drop of more than 500 pips in GBP/JPY. The latest move weakened the pair’s near-term bullish structure, FXStreet said, though the broader outlook remained tilted higher on the interest-rate gap between the Bank of England and the Bank of Japan. FXStreet noted the BoJ kept its policy rate unchanged at 1.0% on Friday in an 8-1 vote, while the BoE left the Bank Rate unchanged at 3.75% on Thursday in a 6-3 vote, with three policymakers backing a hike to 4.0%.
Technically, FXStreet said GBP/JPY is trading around 213.75 near June lows and is below the 21-day, 50-day, and 100-day simple moving averages, with the RSI in the mid-30s. FXStreet added that resistance appears near the 100-day SMA around 214.48 and the 50-day SMA near 215.65, while support sits near 212.50 and then 210.50, with a daily close below those levels likely to extend the correction.