GBP/JPY rebounds towards 162.00 amid dovish BOJ, risk-off mood

• GBP/JPY sees a quick rebound amid dovish BOJ comments.
• Risk-off mood lifts the demand for the bonds, weighing down on the yields.
• GBP/JPY bulls stay hopeful whilst above the 21-SMA support.

The pound/yen is rebounding from recent lows on Thursday, ending a four-day rise to reach six-day highs of 162.28.

At the time of writing, the cross is down slightly on the day, trading at 161.80, pulled down by the risk-off market profile, which has re-invigorated safe-haven flows into US Treasury securities. This has prompted a new corrective decrease in Treasury rates throughout the curve, which is working in tandem with the current collapse in the stock market.

The hawkish Fed minutes, along with the remaining dangers associated with the Russia-Ukraine conflict, are dampening risk sentiment, as the US currency attempts to reclaim its upward trend in recent weeks. Meanwhile, the Bank of Japan (BOJ) officials' most recent dovish statements, in which they defend the country's ultra-loose monetary policy, are helping to keep the cross afloat, according to Reuters.

With the overall market attitude, yields' price movement, future Ukraine developments, and Fedspeak, the pair is expected to stay at the mercy of the market's mood.

GBP/JPY: Technical outlook

From a short-term technical standpoint, bulls in the GBP/JPY remain optimistic as long as they maintain control of the bullish 21-Simple Moving Average (SMA) at 161.36.

In the event of a break of the latter, the horizontal 50-SMA at 161.08 might come into play. Buyers will draw a line in the sand at 160.51 on April 5, which is a new low.

GBP/JPY four-hour chart

The 14-day Relative Strength Index (RSI), however, is inching higher while above the midline, allowing room for more upside.

Immediate resistance is seen at 162.28 (the previous day’s high), above which buyers will gear up for a fresh run-up towards 165.00.

GBP/JPY additional levels to watch