GBPJPY grinds higher towards 165.00 after downbeat Japan Q3 GDP, UK Employment data eyed

• GBPJPY renews intraday high even as Japan’s Q3 GDP registers contraction.
• Anxiety ahead of the UK’s key jobs report, sluggish yields add to the trading filters.
• Buyers remain hopeful amid BOE vs. BOJ divergence, optimism surrounding the UK’s new government.

GBPJPY justifies the downbeat Japan Gross Domestic Product (GDP) data during early Tuesday in Asia, as it refreshes the intraday high near 164.80 by the press time. In doing so, the cross-currency pair defends the previous day’s rebound from a one-month low ahead of the UK’s employment report.

That said, Japan’s GDP for the third quarter (Q3) of 2022 disappointed the Japanese Yen (JPY) traders as it dropped to -0.3% QoQ versus 0.3% expected and 0.9% prior. The Annualized figures also weighed on the JPY prices by declining to -1.2% compared to 1.1% market forecasts and 3.5% prior.

It’s worth noting that hopes of witnessing an increase in the UK’s minimum wage, as signalled by The Times, also underpinned the GBPJPY upside of late.

Above all, the monetary policy divergence between the Bank of England (BOE) and the Bank of Japan (BOJ) could be considered as the key catalyst for the GBPJPY pair’s strength. That said, the BOJ has been defending its easy-money policies while BOE Governor Andrew Bailey signalled more rate hikes in the last week.

Moving on, the UK’s headline Claimant Count Change is likely to provide a welcome figure of -12.5K for October versus 25.5K. However, an anticipated no change in the Unemployment Rate of 3.5% for three months to September might tease the GBPJPY sellers in a case of the negative surprise.

Elsewhere, the recent rebound in the US Treasury yields and the market’s cautious optimism, emanating from hopes of easy rate hikes from the key central banks, keep the GBPJPY buyers hopeful.

Technical analysis

GBPJPY remains sidelined between the 100 and the 50 DMAs, respectively around 164.00 and 164.90. However, the downbeat RSI and the MACD conditions keep the sellers hopeful.