GBP/JPY erases weekly gains after Kuroda’s comments

• Yen jumps after BoJ’s Kuroda comments about rising inflation. 
• UK data: Q4 GDP surpassed expectations. 

The GBP/JPY pair lost all weekly gains in a few hours amid a rally of the yen across the board. The pair was trading near 156.00 and dropped sharply more than 200 pips. It bottomed at 153.40, the lowest level since Monday. 

The slide took place following comments from Bank of Japan Governor Kuroda from the WEF in Davos. He said that medium to long-term inflation expectations were projected to rise. He also mentioned signals that wages were rising. His speech triggered a rally of the yen. 

Earlier the pound was holding near monthly highs supported by UK GDP data. The report showed that the economy expanded 0.5% during the fourth quarter and 1.5% on an annualized basis. 

Technical levels 

GBP/JPY is falling for the second day in a row as it trades near the lows at 153.60. Some technical indicators, like the Doji formation in the weekly chart, could point to a corrective move for the coming sessions, although the main trend continues to point to the upside. 

To the downside, support levels might lie at 153.00/10 (Jan 19 low), 151.90 (Jan 15 & 16 low) and 150.60 (20-day moving average). On the upside, resistances could be seen at 154.40 (Jan 25 low), 155.30 and 155.80/90.