Anna 
During the early European hours on Wednesday, the GBP/JPY pair depreciated to near 190.10 as the Japanese Yen (JPY) gained strength. Reports from Jiji Press suggested that some participants in the upcoming Bank of Japan (BoJ) policy meeting on March 19 may propose “lifting negative interest rates,” contributing to the downward pressure on the GBP/JPY cross.
BoJ Governor Kazuo Ueda has expressed skepticism about the sustainability of Japanese inflation reaching the 2% target. Concerns about a possible recession might lead the BoJ to postpone its plans for monetary policy tightening. An unnamed source cited by Reuters indicates that the BoJ is likely to maintain its forecast for a moderate economic recovery but may revise its assessment of consumption and factory output at the March meeting.
Tuesday’s data showed a rebound in the Tokyo Consumer Price Index (CPI) from a 22-month low in February, reigniting discussions about the potential exit from the negative interest rates regime by the Bank of Japan.
On the other hand, the Pound Sterling (GBP) strengthened in anticipation of UK Chancellor Jeremy Hunt’s Budget Report scheduled for Wednesday. Speculation suggests that the report may include a reduction in national insurance contributions for employees.
However, the UK’s BRC Like-For-Like Retail Sales (YoY) for February disappointed with a figure of 1.0%, below the expected 1.6% and the previous period’s 1.4%. Later today, traders will closely observe the S&P Global/CIPS Construction PMI for February to gain insights into the UK’s economic activity.
