GBPJPY Pair Continues to Tumble After Latest U.K. Lockdowns
GBPJPY has fallen under the 134.00 level after the U.K. announced further lockdown restrictions blaming a rise in virus cases. A 10 p.m. curfew has been placed on the country’s pubs and restaurants, which will do nothing to help the embattled hospitality sector, whilst there is talk of a 14-day mini-lockdown in October to coincide with school holidays.
The pound has tumbled versus the Yen since the Brexit talks re-emerged as a threat to the currency’s stability and further restrictions could damage the economic recovery.
The Japanese business sector is not shy of its own problems after a think tank revealed that 36,000 Japanese businesses had closed down. Tokyo Shoko Research said that 53,000 total could close their doors without by year-end. The current number is close to 25% higher than last year, but these are companies that are not bankrupt but are shutting down due to demand pressures.
Bank of Japan Governor Haruhiko Kuroda had increased debt purchases and extended credit to ease corporate funding issues and said today that these measures could be extended beyond the deadline early-next year. Kuroda said: “There’s a good possibility we will extend the deadline for the programs if needed, depending on the impact of COVID-19”. Despite the Japanese business woes, the pound will still see selling pressure into mid-October with the Brexit agreement deadline.
GBPJPY Technical Outlook
The GBPJPY pair has collapsed from a September 1st high above 142.00 to trade at 133.56. The 134.00 level is immediate support to try for a push to 136.00, but the recent price weakness and market dynamics probably favours further downside with the 132.00 level as a target. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.