GBP/JPY juggles around 153.50 on rising commodity prices, investors await BOE and BOJ policy

GBP/JPY hovers around 153.00 ahead of monetary policies from BOJ and BOE.

The rising prices of commodities amid the Russia-Ukraine war are hurting the Japanese economy.

BOE has raised its interest rates earlier by 25 bps twice in December and February.

The sanctions on Russia by the Western leaders have boiled the oil prices, which eventually has pushed the prices of food products, energy, and metals higher. Japan is a leading importer of the majority of the commodities and the Asia major is importing the expensive commodities at a higher exchange rate of US dollars, which has forced investors to dump the Japanese yen. It is worth noting that Japan is the fifth-largest consumer of oil in the global market. Rising outflow is posing a threat of worsening fiscal deficit for Japan, going forward.

Meanwhile, the Bank of England (BOE) is preparing for its third 25 basis points (bps) interest rate hike on Thursdays monetary policy meet. The BOE has raised its interest rates by 25 bps twice in December and February. The BOE forecasted that its inflation rate would peak at about 7.25% in April, when household energy tariffs are due to rise by more than half in the pre-Ukraine crisis period, as per Reuters. After the Ukraine crisis, inflation is likely to overstep the earlier expectation swiftly and BOE may resort to further extension in their benchmark rates.

The BOE will not seldom release its new benchmark rates, but the Bank of Japan (BOJ) will also come up with its monetary policy on Friday. A power-pack week is likely to keep the asset volatile and hopes we can see a change in the trend further.