GBP/JPY tumbles 150-pips post BOE announcement

The GBP/JPY cross witnessed a sharp reversal from 2-week high level of 146.80 and tumbled nearly 150-pips post BOE decision.

The British Pound came under some intense selling pressure after the BOE MPC voted 6-2 to hold interest rates at record lower level of 0.25%. A shift in the MPC vote distribution, from 5-3 previous, coupled with a downward revision the inflation and economic growth forecast, might have been perceived as a dovish tilt and was seen weighing heavily on the British Pound.

   •  BoE lowers GDP forecasts

Meanwhile, the market largely ignored MPC forecast of two, rather than one, rate hike action over the forecast horizon and seems to be taking cues from the statement that interest rate should be 'gradual' and 'limited'. 

   •  BoE: Rates may need to rise more than markets currently imply

Adding to this, an offered tone around the USD/JPY major further collaborated to the pair's sharp reversal from the highest level since July 18, touched in wake of today's upbeat UK services PMI print for July.

With today's sharp fall, the cross has now reversed all of its gains recorded over the past couple of days as investors now look forward to the BoE Governor Mark Carney's pressure, where the Q&A session might trigger a fresh bout of volatility across GBP crosses.