• GBP/JPY has corrected to near 183.00 as investors are awaiting the speech from BoE Bailey.
• Hawkish interest rate guidance is anticipated from Andrew Bailey as UK’s May inflation turned out highly persistent.
• Broader weakness in the Japanese Yen has propelled chances of a stealth intervention.

The GBP/JPY pair has shown a corrective move to near 183.00 in the early London session. The cross has shown correction after posting a fresh seven-year high at 183.76. Selling pressure in the cross stemmed as investors are awaiting the speech from Bank of England (BoE) Governor Andrew Bailey, which is scheduled at 13:30 GMT.

Hawkish interest rate guidance is widely anticipated by Andrew Bailey as inflationary pressures in the United Kingdom turned out highly persistent. Headline Consumer Price Index (CPI) landed higher than expectations as weak gasoline prices were offset by stable food inflation and rising prices for recreational goods and services, air travel, and second-hand cars. Core CPI that excludes volatile oil and food prices printed a fresh high of 7.1%, which has made BoE Bailey and UK PM Rishi Sunak.

Considering the fact that restrictive monetary policy by the central bank is failing to put a lid over stubborn United Kingdom inflation, UK FM Jeremy Hunt looked beyond quantitative measures and discussed with industry regulators about limiting profit margins. Also, wage cuts in the public sector are under consideration.

On the Tokyo front, broader weakness in the Japanese Yen has propelled chances of a stealth intervention by the Bank of Japan (BoJ). Japanese Finance Minister Shunichi Suzuki said that he “will respond appropriately if FX moves become excessive.”

Also, the speech from BoJ Governor Kazuo Ueda will be keenly watched. Investors will keep an eye on commentary about a tweak in the Yield Curve Control (YCC) and an exit from the ultra-dovish policy