Anna 
GBP/JPY exhibited fluctuating trends, hovering around 181.20 during the European session on Friday, as it retraced intraday gains. The pair’s attempt to extend its upward trajectory followed a rebound from a two-month low of 178.34.
The cross received upward support following hawkish remarks from Bank of England Governor Bailey, who contributed to the overall bullish sentiment by stating that inflation is still distant from being consistent with the target. Despite the optimistic tone, the Bank of England opted to maintain interest rates at 5.25% in its Thursday decision.
Additionally, the UK’s GfK consumer confidence index fell to -22 in December, surpassing the anticipated -24. Investors are eagerly awaiting the release of the UK Purchasing Managers Index (PMI) data on Friday.
Conversely, growing expectations that the Bank of Japan (BOJ) may shift its policy stance in 2024 could lend support to the yen. Japanese Finance Minister Shunichi Suzuki, responding to the yen’s recent rapid appreciation, made a verbal intervention without commenting on daily currency movements. He emphasized the importance of monitoring market dynamics and expressed a preference for currencies displaying stable trends aligned with fundamentals.
Japan’s Jibun Bank’s preliminary November manufacturing purchasing managers’ index indicated a contraction in business activity in the manufacturing sector, declining to 47.7 from the previous 48.3. However, the services PMI showed improvement, rising to 52.0 from 50.8.
Traders are anticipated to exercise caution, refraining from aggressive bets, as they await a crucial Bank of Japan policy meeting scheduled for the upcoming week.
