GBP/JPY drops 1 big figure as UK yields tumble

The GBP/JPY cross eroded more-than 100-pips so far this session, mainly driven by a sharp sell-off in the cable , while the USD/JPY pair trims losses and looks to regain 102 handle.

GBP/JPY trades below all major DMAs

Currently, GBP/JPY trades -0.38% lower at 132.30, quickly bouncing-off lows struck just ahead of 137 handle. The GBP/JPY cross ran through fresh offers over the last hour, as the GBP/USD pair breached 1.3000 support and fell sharply in tandem with the UK Gilt yields. The yield on the benchmark 10-year gilts, which moves inversely to its price, fell 2-1/2 basis points to 0.851%.

While the losses remained capped as the USD/JPY pair embarked upon a minor-recovery mode and now makes headway towards 102 handle. Next of note for the cross remains the US housing starts and building permits data due later in the NA session.

GBP/JPY Levels to consider 

The pair has an immediate resistance at 133.40 (5-DMA), above which 134.27 (50-DMA) could be tested. On the flip side, support is seen at 132 (round number) that at 131.80 (daily S2).