The British pound (GBP) gained ground against the Japanese yen (JPY) on Tuesday (May 04, 2021), pushing the GBP/JPY currency pair above 151.00 ahead of the Bank of England’s (BoE) announcement regarding interest rates.
The Bank of England is scheduled to release figures amid interest rate decision news on Thursday (May 06, 2021). As per the view of FXStreet.com economists, the BoE interest rate decision news might remain unchanged with a reading of 0.1% in April 2021 compared to the reading of 0.1% in the month before.
The Bank of England uses interest rates as a monetary policy tool to control the economic outlook of the country. It increases or reduces the interest rates as per the prevailing economic situations. If BoE adopts a hawkish approach towards the country’s inflationary outlook and raises interest rates, it indicates positive economic development.
In addition to the above news, there is one update that might sustain the growth of GBP/JPY.
Today, the Chartered Institute of Purchasing & Supply and Markit Economics released the Markit Manufacturing PMI with a reading of 60.9 this month compared to the month before data of 60.7.
The PMI manufacturing is a measure of the manufacturing sector’s economic health in the United Kingdom. It’s worth remembering that the service sector in the United Kingdom does not affect, either positive or negative. A reading of more than 50 indicates expansion, while a reading of less than 50 indicates contraction.
Given the macro-economic outlook of the pair, it may be a better option in the short term if the pair was sold around 149.45.