GBP/JPY tumbles to 149.00 following BOJ bond purchase reduction

• The GBP/JPY slides in Tokyo markets, giving up overnight gains.
• The Yen is being bolstered by a surprise cut in BOJ bond purchases.

The GBP/JPY is dropping once again following a volatile Tuesday that left the pair sideways on the day, and the pair is currently testing the waters below the 149.00 handle.

The Sterling is stooping to the Yen as the JPY gets a boost following an unexpected slashing of the Bank of Japan's (BOJ) long-term bond purchases, buying up 70 billion Yen worth of long-dated government paper versus the previous 80 billion purchase.

Markets are already sensitive to sentiment swings following a surprise bullish showing from the Fed's new chairman Jerome Powell yesterday, and the Sterling finds itself on slightly weaker footing today following year-on-year BRC Shop Index coming in at a disappointing -0.8% and the Consumer Confidence indicator printing at -10. While markets anticipated a small decline in the Shop Index, and the Consumer Confidence Indicator was also expected, the miss on data comes at a bad time despite both indicators rarely having a noted impact in GBP trading.

Traders are beginning to get squirrelly about the Pound Sterling as Prime Minister Theresa May's outline of Brexit conditions will be coming in her speech scheduled for Friday, and with markets anticipating a 'soft-Brexit' scenario from the PM, ongoing Brexit concerns and fractious infighting from PM May's ruling Conservative party, Brexit continues to provide more trouble than it may be worth as businesses in the UK still wait to discover what kind of environment they will be operating in after Brexit takes effect next March.

GBP/JPY Technicals

The pair continues to trade in a consolidation range just above the 200-day SMA, and H4 candles showing lower highs squeezing price action into the floor set at major support at 148.75, with further support from 138.12 while resistance builds up from the 150.00 major handle to 150.92.