GBP/JPY rebounds from multi-week lows, climbs to mid-131.00s post-BoE

• A pickup in the British pound assisted GBP/JPY to stage a modest recovery post-BoE.
• The BoE left rates and Asset Purchase facility unchanged at 0.10% and £645 billion.
• Some optimistic comments by BoE Governor Bailey provided a modest lift to the GBP.

The British pound strengthened a bit post-BoE and lifted the GBP/JPY cross to fresh session tops, around the 131.65 region in the last hour.

The Bank of England (BoE) announced its latest monetary policy decision this Thursday. As was widely expected, the UK central bank left interest rates and Asset Purchase program unchanged at 0.10% and £645 billion, respectively.

Meanwhile, 2 BoE members voted for £100 billion increase to the QE program. However, the dovish vote distribution, to a larger extent, was negated by some optimistic comments by the BoE Governor Andrew Bailey.

The BoE Governor expects the economic recovery to be much more rapid than the global financial crisis and added that there will be some long-term damage to the capacity of the economy, though the effects were judged to be relatively small.

This comes after the UK Prime Minister Boris Johnson on Wednesday indicated that they want to get going with some of the lockdown easing measures on Monday and eventually provided a goodish lift to the British pound.

Apart from this, an offered tone surrounding the safe-haven Japanese yen, amid a positive mood around the global equity markets, remained supportive of the pair's intraday positive move, albeit lacked any strong bullish conviction.

With Thursday's key event risk out of the way, it will now be interesting to see if the cross is able to capitalize on the recovery from six-week low or runs into some fresh supply amid absent relevant market moving economic releases.

Technical levels to watch