23 October 2025,02:26
Daily Market Analysis New
23 October 2025, 02:26
Key Takeaways:
*The Pound eased after cooler UK inflation data, though sticky wages kept the BoE cautious on early rate cuts.
*Markets expect the BoE’s first rate cut by February 2026 as gilt yields track global declines.
*The Yen stayed under pressure with Japan’s policymakers warning against “excessive moves.”
Market Summary:
The British Pound weakened modestly against the dollar as investors recalibrated Bank of England rate-cut expectations after softer inflation data earlier in the week. While UK headline CPI eased more than anticipated, wage growth remains sticky, leaving policymakers in a delicate balancing act. BoE Governor Andrew Bailey reiterated that “policy must stay restrictive for some time,” though markets now see the first rate cut by February 2026. UK gilt yields slipped, mirroring broader global yield declines, as traders anticipate a synchronized global easing cycle into 2026.
In contrast, the Japanese Yen remained under persistent pressure, hovering near 157 per dollar despite speculation of possible intervention. The Bank of Japan’s minutes revealed continued caution toward tightening, with members emphasizing that inflation expectations “have yet to be firmly anchored at 2%.” Finance Minister Shunichi Suzuki reaffirmed readiness to act against “excessive currency moves,” but verbal warnings have done little to halt yen weakness amid widening U.S.-Japan rate differentials. The recent rise in oil prices also weighed on Japan’s trade outlook, adding further strain on the currency.
Both the Pound and Yen are increasingly sensitive to global yield spreads and U.S. data momentum. A sustained dollar correction could offer temporary relief, yet structural divergences in policy stance with the BoE leaning toward eventual easing and the BoJ remaining ultra-accommodative — suggest asymmetric risks ahead. Unless inflation dynamics in Japan shift decisively, the yen’s recovery potential remains limited, while sterling’s trajectory will hinge on whether the UK economy can avoid a deeper slowdown amid waning consumer momentum.
Technical Analysis
GBP/JPY remains range-bound on the chart, consolidating between 202.60 support and 203.40 resistance as traders await a clearer directional catalyst. Despite recent recovery attempts, price action continues to struggle near the 50-period moving average around 203.50, suggesting that upward momentum remains capped. The broader structure reflects a consolidation phase following the sharp rejection from the 205.00 handle earlier this month.
From a momentum perspective, the RSI hovers near 52 signaling a neutral bias with neither buyers nor sellers in firm control. The MACD shows marginally positive momentum, but with the histogram flattening and signal lines converging, suggesting a lack of strong conviction in either direction.
Overall, GBP/JPY’s technical outlook remains neutral-to-bearish unless bulls can reclaim the 204.00–205.00 zone with strong follow-through buying.
Resistance Levels: 203.40, 204.80
Support Levels: 201.80, 200.50
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