GBP/JPY moves around 161.50 as Winter Energy Shock worries rise

GBP/JPY is trading between 161.32-161.60 in Tokyo. After Wednesday's firmer rebound from 160.86, the cross is sideways. The cross rose after retesting Tuesday's low near 161.00, but the lack of a convincing reason caused it to drift sideways.

As the UK economy approaches a recession and energy shocks loom, the cross could reverse its drop. After Russia's invasion of Ukraine, British gas and power costs are rising due to an embargo on Russian energy imports. As winter approaches, the energy regulator has enforced an 80% price cap hike.

The energy price cap hike will undoubtedly depress British homeowners. The administration has failed to cut the labor cost index, which is at its highest level in 40 years. Rising energy prices will reduce consumer confidence in the economy. The pound could be affected.

The Bank of Japan's (BOJ) conservative monetary policy has failed to stimulate the yen zone. The Jibun Bank Manufacturing PMI for Japan was 51, lower than 51.8 and 52.1. Services PMI was 49.2, compared to 50.7 and 50.3.