GBP/JPY prints five-day uptrend near 151.50 amid mixed concerns over Brexit, covid

• GBP/JPY picks up bids towards intraday high, stays firmer around 13-day top.
• UK covid-led deaths jump over 200 for the first time since March, Japan braces for extended COVID-19 state of emergency.
• Goods can keep moving from NI to GB, NI Protocol looms.
• British shoppers numbers improve in August, risk catalysts are the key.

GBP/JPY remains on the front foot around 151.60, up for the fourth consecutive day, as Tokyo opens for Thursday’s trading. The cross-currency pair recently benefited from the market’s improved sentiment and upbeat fundamentals for the UK. However, the covid woes and cautious mood ahead of Friday’s key US jobs figures challenge the buyers.

Reuters rely on the monthly footfall data compiled by Springboard to convey the much-awaited big return of shoppers. “The number of shoppers hitting Britain’s high streets, shopping centers and retail parks continued to improve in August, with the gap on the same month in 2019 reducing to -18.6% from -24.2% in July,” said the news.

On the same line, the UK Express cheers business sentiment details to cheer the entrepreneurs’ optimism in Britain versus Europe. The news said, “Business confidence in Brexit Britain reached a four year high as Eurozone confidence fell.”

Alternatively, the UK’s virus-led deaths rose past 200 for the first time since March the previous day. The UK Mirror said, “Coronavirus cases in the UK have on Wednesday risen by 35,693 with a further 207 deaths recorded in the last 24 hours - this is the first time daily deaths have risen above 200 since March.”

The covid conditions are also grim in Japan as Kyodo news quotes government sources to highlight possibilities of extended activity restrictions in the key prefectures including Tokyo. The news mentioned, “Japan is considering extending the COVID-19 state of emergency covering Tokyo and 20 of Japan's 47 prefectures by another two weeks, as it looks increasingly unlikely the current situation will warrant the lifting of the measure on its planned Sept. 12 expiry, government sources said Wednesday.”

It should be noted that the World Health Organization (WHO) observes another strain of the virus, namely Mu, which has vaccine resistance and poses serious challenges.

Elsewhere, the BBC said, “New post-Brexit rules for moving goods from Northern Ireland to the rest of the UK have been delayed.” It should be noted, however, that the UK Express’ criticism of the EU’s restrictions for the UK from re-entering the Lugano Agreement highlights the Brexit woes.

On a broader scale, downbeat US job data-related signals tame the tapering woes and propel the market’s risk-on mood.

Amid these plays, the US 10-year Treasury yields eased 0.3 basis points (bps) to 1.299% by the end of Wednesday’s North American session whereas the S&P 500 Futures seek fresh directions around the record top by the press time.

Moving on, the virus updates and Brexit news can entertain traders ahead of Friday’s US jobs report.

Technical analysis

Although an eight-day-old rising trend line, near 151.45, keeps GBP/JPY buyers hopeful, 50-DMA and a downward sloping resistance line, respectively around 152.00 and 152.40 challenges the quote’s short-term upside.