Global macro overview for 23/08/2016:
Interesting remarks from former Bank of Japan board member Sayuri Shirai hit the mass media and the financial news companies. The remarks relate to the recent BoJ stimulus, that is heading in the right direction, according to Shirai. She argues, that due to stagnant income Japanese households are expected to spend less, but the reason for this is the inflationary mindset, but not negative rates. Moreover, she said she is not sure how much stimulus will help, but BoJ should keep 2% target as a long-term goal, and try to achieve 1% in the short term. In conclusion, a quite hawkish point of view regarding recent BoJ stimulus increase from the former BoJ board member is worthy of consideration.
Let's now take a look at the GBP/JPY technical picture in the daily time frame. Bears recently managed to test the recent low in this market at the level of 128.75, but since then no real impulsive trend reversal can be seen. Instead of that the market is still trading below all moving averages and below the recent technical resistance at the level of 133.22. The outlook remains bearish to horizontal.
