GBP/JPY tries to surpass 164.00 as risk-off sentiment diminishes and BOE-BOJ policy is watched
GBP/JPY is close to surpassing the immediate barrier of 164.00. The likelihood of expanding BOE-BOJ policy divergence provides support for the pound bulls. The Japan National CPI came in at 3.0% as opposed to the anticipated 2.6%.

In the early Asian session, the GBP/JPY pair is on the verge of surpassing the round-level resistance of 164.00. The asset has extended its advances after breaking above the limited consolidation zone of 162.78 and 163.60. As the risk-on impulse recovers, the risk-sensitive currency has attracted large buys and is anticipated to gain further.
As the policy difference between the Bank of England (BOE) and the Bank of Japan (BOJ) is anticipated to grow, the cross is likely to stage a fresh rally. The BOE is expected to announce an additional 50 basis point (bps) rate hike on Thursday as a move toward restoring order to the inflation situation. The recent fall in the headline Consumer Price Index (CPI) to 9.9%, compared to the forecast of 10.2% and the previous announcement of 10.1%, will not reduce the magnitude of the rate hike.
In addition to having the highest inflation rate among G-7 nations, the United Kingdom is also experiencing an energy crisis. A major drop in price pressures is essential, or else it will continue to undermine the confidence of households, which are already compelled to make larger payments.
On the Tokyo front, BOJ officials are concerned about the sustained devaluation of the Japanese yen and are anticipated to change their attitude this time. A protracted ultra-dovish position will end, and the Bank of Japan will move toward a neutral stance. However, this does not justify a reduction in the BOE-BOJ policy difference.
In the meantime, the National CPI was reported at 3% by the Statistics Bureau of Japan, which is higher than the forecasts and the previous release of 2.6%. In addition, the core CPI, which excludes food and energy costs, has increased to 1.6% from 1.2%, but remains below predictions of 1.7%.
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