GBP/JPY extends slide from yearly highs toward 144.00

• GBP/JPY is falling for the second straight day on Tuesday.
• Risk aversion helps JPY gather strength against its rivals.
• Japanese government introduces new fiscal stimulus to battle coronavirus.

The GBP/JPY pair climbed to its highest level since February 2020 at 144.96 on Monday but struggled to preserve its bullish momentum. After closing in the negative territory on the first trading day of the week, the pair extended its slide and was last seen trading at fresh daily lows near 144.20, losing 0.25%.

JPY capitalizes on safe-haven flows

In the absence of significant data releases and fundamental drivers, the risk-averse market environment seems to be helping the safe-haven JPY outperform its rivals. Reflecting the sour market mood, the S&P 500 Futures are down 0.25% on the day minutes ahead of the opening bell.

Earlier in the day, the Japanese government announced that it has decided to spend an additional 1.1372 trillion JPY in emergency reserves to support economic recovery. However, this development was largely ignored by the market participants.

On Wednesday, the NIESR GDP Estimate for January will be the only data featured in the UK economic docket. Later in the day, Bank of England Governor (BoE) Andrew Bailey is scheduled to deliver a speech at 1700 GMT.

Technical levels to watch for