Forex: GBP/JPY tumbles and tests 143.00

FXstreet.com (Barcelona) - From 143.60, the GBP/JPY erased its gains and spiked to below the 143.00 mark after the release of disappointing data in the UK. The annualized GDP in the UK was actually of 0.2% growth in Q4, instead of the expected 0.3%. The Current Account deficit improved less than expected, from £-15.074B to £-14.037B (consensus at £-12.700B). Not as bad as expected was Total Business Investment, that fell from 3.8% to -0.8% in Q4, beating consensus of -1.2%.

In regard to the Yen, the BoJ is reportedly preparing to merge its two JGB buying programs into one, with the intention of making the scale of the BOJ's easing programs more transparent. “The biggest consequence of combining both programs though is that it could give the BoJ far greater freedom to purchase a wide range of tenors. By design, APP purchases are concentrated at the very front end of the JGB curve in the 1-3y sector, whereas Rinban operations can buy all the way out to the 30y point”, wrote UBS analyst Gareth Berry. “A combined program is likely to be more Rinban-like in its freedom to buy across the curve. That means lower JGB yields at the long end, and a higher USD/JPY seem likely as a result”, he added.

Mataf.net analysts point to resistance at 143.80, 144.75 and 145.25. On the downside, supports might be found at 143.10, 142.45 and 141.85.