GBP/JPY tracks firmer yields to renew one-week high above 154.00, UK jobs, Ukraine eyed

• GBP/JPY picks up bids to poke monthly high, up for the third consecutive day.
• Receding fears of Russia-Ukraine war joins firmer US Treasury yields to favor bulls.
• Hopes of firmer UK data, BOE’s rate-hike keep buyers hopeful ahead of February jobs report.

GBP/JPY rises to the highest levels since March 03, up 0.50% intraday around 154.40 heading into Tuesday’s London open. In doing so, the yen cross prints a three-day uptrend amid firmer US Treasury yields and cautious optimism in the market ahead of the UK’s monthly employment data.

US 10-year Treasury yields rose to the fresh high since June 2019 before the latest retreat to 2.14%. The 5-year coupon, on the other hand, refreshed 34-month high ahead of stepping back to 2.098% at the latest.

While the US T-bond yields portray the market’s firm belief that the Fed will rush for faster monetary policy tightening, stock futures in the US and Europe also printed mild gains amid expectations that Ukraine will have peace with Russia by May. Also adding to the market’s cautious optimism is the restart of the diplomatic negotiations that were halted abruptly the previous day.

On the contrary, escalating covid woes in China and Russia’s readiness to achieve all goals in full test the GBP/JPY buyers.

It’s worth noting that the traders’ view of a 0.25% rate hike by the Bank of England (BOE) also underpins the pair’s run-up. As per the latest reading of the CME’s BOEWatch Tool, 100% probability is favoring such a move.

For immediate directions, UK Claimant Count Change for February and ILO Unemployment Rate for three months to January will be crucial. However, risk catalysts gain major attention when it comes to yen pairs.

Technical analysis

A clear upside break of a five-week-old trend, around 153.70 by the press time, directs GBP/JPY buyers towards the 50-DMA level surrounding 155.20.