GBP/JPY drops sharply from multi-year highs, correction phase ahead?

• GBP/JPY having worst day in a month. 
• Yen gains ground on BoJ tapper, despite higher US yields. 

The GBP/JPY pair was falling sharply on Tuesday, suffering the worst slide in a month. A decline of GBP/USD and a rally of the yen across the board pushed the pair lower. 

The yen rose sharply after the Bank of Japan reduced its purchases of long-term government bonds, creating some expectations that it could start to unwind its massive stimulus policy later this year. Rising US yields did not stop the yen. The US 10-year jumped to 2.53%, for the first time since March. 

GBP/JPY reached yesterday at 153.66, the highest level since June 2016. Today during the Asian session it approached the highs before reversing sharp following BoJ announcement. 

The pair continues to decline during the European session and bottomed in New York at 151.93. During the last hours trimmed losses and it was hovering around 152.20/30, down more than a hundred pips. 

Technical levels 

The main trend continues to point to the upside but the momentum eased after today’s slide. Price broke a short-term uptrend line and also pulled back below 152.80. If the correction continues, under 152.00, support levels might lie at 151.45/50 and 151.15 (Dec 22 & 27 low). 

To the upside, immediate resistance could be seen at 152.70 followed by 153.00 and 153.60/70 (2018 highs).