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Forex - GBP/JPY advances after BoE minutes boost rate outlook

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Forex Pros - The pound was higher against the yen on Wednesday, rising to hit a daily high, after the minutes of the most recent Bank of England Monetary Policy Committee meeting revealed a third member voted to raise rates.

GBP/JPY hit 134.62 during European afternoon trade, a daily high; the pair subsequently consolidated at 134.26, climbing 0.52%.

The pair was likely to find support at 133.24, Tuesday's low and resistance at 135.49, the high of February 18 and a six-month high.

Earlier in the day, the minutes of the February 10 BoE policy meeting revealed that the bank's chief economist Spencer Dale joined Andrew Sentance and Martin Weale in voting for higher rates, moving the BoE closer to tightening policy in the face of accelerating inflation.

The minutes showed that policy members voted 6-3 to maintain the benchmark interest rate at a record low 0.50%.

Economists had expected a repeat of last month's 7-2 vote, though another member joining the BoE's hawkish camp had been seen as a possibility after BoE Governor Mervyn King said last week that the MPC was unusually divided.

According to the minutes, "Most members agreed that the balance of risks to inflation in the medium term relative to the target had moved upwards in recent months and that the case for withdrawing some of the current exceptionally accommodative monetary policy had consequently been strengthened".

Meanwhile, the pound was down against the euro, with EUR/GBP easing up 0.05% to hit 0.8463.

Also Wednesday, government data showed that mortgage approvals in the U.K. were unexpectedly unchanged in January, holding steady at 28.9K.

Meanwhile, Bank of Japan Deputy Governor Hirohide Yamaguchi said earlier Wednesday that while he's optimistic about the nation's economy in the short term, he's cautious in the long run because of the difficulty of overcoming deflation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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