GBPJPY Breaking Out

Yen Weakening on WednesdayGBPJPY is on the move today with the pair breaking out above the 184.40 level. JPY has weakened materially in recent days alongside an improvement in global risk appetite. Thew move higher across risk markets has seen weakened safe-haven support for the Yen which has come under pressure across the board into the middle of the week. Expectations that the BOJ will keep policy unchanged at its upcoming January meeting mean there is little reason for bulls to get excited about JPY near-term. However, movement in the options market suggests there is still plenty of hedging activity going on, meaning that traders are wary of risks that perhaps the bank signals a potential upcoming shift in policy at the March or April meetings.Bailey Comments Boost GBPGBP is trading well mid-week, boosted by encouraging comments from BOE governor Bailey. Bailey told markets today the bank is hopeful that the recent fall in mortgage rates will continue in coming months, prompting a better growth outlook for the UK. However, Bailey stopped short of offering any guidance on monetary policy. Traders have scaled back their BOE tightening expectations recently, in line with falling inflation. Judging by the market reaction, the sense is that a better growth outlook is feeding into more positive sentiment towards GBP near-term.Technical ViewsGBPJPYThe correction lower in GBPJPY found strong support into the bull channel lows and the 179.95 level. The market has since bounced sharply higher and is now probing above the 184.38 level. With momentum studies pushing higher, the focus is on a test of the 186.71 level next and the bull channel highs above.