Yen currency traders may still be surprised by the situation that happened in the Asian session yesterday as the market expected nothing strange during the monetary policy meeting of the central bank of Japan.
But if you look at the chart of the GBP/JPY currency pair, the price suddenly fell from the 167.00 level to reach 158.600 for a 3-month record low.
The Bank of Japan (BOJ) as expected still kept interest rates unchanged at -0.10%, but the central bank's follow-up statement has shaken the market.
Governor Haruhiko Kuroda has announced an adjustment to the Yield Curve Control (YCC), which is a strategy rarely used by other central banks, such as quantitative easing (QE) measures.
The BOJ allowed the Japanese government's 10-year bond yield to rise to 0.50% compared to the previous limit of 0.25%.
The move is seen to attract investment in Japan and drive increased demand for the Yen currency.
Thus, it can be seen that the price on the GBP/JPY chart plunged significantly after the initial decline pattern was displayed at the beginning of the week.
In the past week the price has managed to reach a high level of around 169.00, but a more bearish movement of the price is displayed this week with a surprise from the BOJ.
Yesterday's price movement has also passed the level of 164,500 which analysts expect to be a support zone for prices.
After yesterday's daily low reached around 158,600, there was a price rebound towards the close of the New York session and continued trading today (Wednesday), the price slowed down in the 160,500 zone.
If the rising pattern continues successfully, a further rise is seen to be around 162.00 before the focus target is on the 164.500 zone.
However, with the plunge pattern displayed yesterday, analysts still see a tendency for prices to continue falling lower.
If the price declines and passes the lowest level reached yesterday, it is likely that the 157,700 level will be tested before the price registers the latest 12-week low.
