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GBP/JPY holds near 200-day SMA as yen support stays weak

Rabobank said Japan’s recent tax cuts are unlikely to spur investment that structurally improves growth, leaving the yen without durable policy support.

Reported · Written up by our desk · Major Pairs

GBP/JPY was trading in a narrow range on Thursday, with the British pound modestly outperforming the Japanese yen. The pair changed hands near 212.53 and found support at the 200-day Simple Moving Average (SMA), according to FXStreet.

FXStreet noted that the yen has stayed on the back foot for a third consecutive day, reversing part of an intervention-driven rally that briefly pushed GBP/JPY below 210.00 earlier in the week. Rabobank argued that Japan’s tax cuts do not translate into investments that could structurally improve economic growth, and said the cost of growth-enhancing policies would likely outweigh the budget implications of food tax cuts.

Technically, FXStreet said GBP/JPY remains below the 100-day, 50-day, and 21-day SMAs, keeping the near-term bias bearish. While the pair is still anchored above the 200-day SMA at 211.85, an RSI around 36 and a negative MACD line suggest downside momentum is dominant.

On levels, FXStreet pointed to resistance clustered at the 100-day SMA (214.47), the 50-day SMA (215.44), and the 21-day SMA near 216.47. Support is centered around 211.85 at the 200-day SMA, with a further floor near 210.00, and it said a daily close below these levels could open the door to a deeper corrective phase.

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