• Brexit-related chaos continues to dent sentiment surrounding the British Pound.
• Cautions mood underpins JPY’s safe-haven status and adds to the bearish pressure.
The GBP/JPY cross tumbled to four-month lows during the early European session on Friday, with bears now eyeing a sustained weakness below the key 140.00 psychological mark.
The cross extended its recent bearish trajectory and has now retreated over 650-pips from monthly tops set on May 3 amid persistent selling pressure surrounding the British Pound. The already weaker sentiment deteriorated further after Labour party source said that there is no point doing a deal with a government which is about to collapse.
Meanwhile, the latest comments by the UK opposition leader Corbyn, saying that the Labour will continue to oppose the UK PM Theresa May’s Brexit deal. In his letter to the May, Corbyn confirms Brexit talks have collapsed, which fueled concerns about a no-deal Brexit and continued taking its toll on the British Pound.
It is worth reporting that after failing to get parliament’s approval three times, the government has pledged to bring back the Brexit deal before the parliament for yet another vote in early June.
Adding to this, the prevailing cautions mood, as depicted by a weaker trading sentiment around European equity markets, underpinned the Japanese Yen’s relative safe-haven status and further collaborated to the pair’s heavily offered tone/the ongoing slide to the lowest level since mid-January.