GBP/JPY gunning for 107.00 on North Korea headlines

• The Yen is bowing out as Asia markets surge on North Korean nuclear de-escalation.
• UK production data due today could give the Sterling an extended leg up.

The GBP/JPY is steeply up in Tokyo trading, currently trading near 106.90 on a Yen sell-off sparked by market optimism following a surprise N. Korea-US meet-and-greet announced at the White House in the early session.

The pair is climbing as the Yen recedes in the Asia market as sentiment swings bullish on the back of announced talks between US President Donald Trump and North Korean leader Kim Jong-un,who has already announced that the North Korean hermit kingdom will immediately suspend all nuclear and missile tests, with Kim extending an invitation to President Trump to meet personally via a hand-delivered letter through a South Korean delegation to the White House.

The Sterling will see Industrial and Manufacturing Production figures for January at 09:30 GMT, with the month-on-month figures for manufacturing and industrial production to come in at 0.2% and 1.5% respectively, versus the previous readings of 0.3% for manufacturing and -1.5% in industrial activity. The Pound could use some positive macro reinforcement as Brexit woes continue to hold the Queen's currency back in global markets. It looks increasingly likely that Brexit will turn into a regulatory mess, with Prime Minister Theresa May and European Union leaders in Brussels beginning to cool at May's cherry-picking attempts to negotiate a patchwork of trade and regulatory bodies to oversee a UK-EU trade deal after Brexit begins to take effect next March.

Friday is a big day for the Bank of Japan (BoJ), with the central bank's Interest Rate Decision and subsequent Press Conference kicking off at 04:00 GMT, and despite the BoJ clearly telegraphing they have no intention of lifting interest rates anytime soon, markets will be watching BoJ governor Kuroda carefully, looking for nuanced changes in his speech rhetoric in order to glean insight into the bank's moves in the future.

GBP/JPY Technicals

The pair has been consolidating just beneath the 200-day SMA for most of the week, but a successful upwards correction for the Sterling may not be on the cards following February's steep decline. H4 candles have the pair set to make a mild higher low, but any post-BoJ Yen buying could easily eat away at the correction. Intraday support is sitting at 105.90 and 105.50 with resistance now at 107.20 and 107.50.