Fundamental analysis of GBP/JPY

This thread is to address what exactly moves GBP/JPY. Specifically I am looking for short to medium term factors. Long term trends can easily be seen on a chart, whereas short to medium term trends can change quickly and are harder to trade.

What specific fundemental factors move it and why?

We know it is a carry trade/high risk pair. So sentiment moves it quite a bit, whether risk aversion to drive it down or vice versa.

What kind of news drives risk aversion or risk tolerance? What specific news events are most important?

What other markets or other currencies effect this pair and how/why?

I have been studying this pair quite a bit with technichal analysis but I and I'm sure many people could learn quite a bit more about fundemental analysis on this pair. Please share your ideas and experiences.

Global equity markets... especially the Dow and Nikkei. Markets up = good for carry pairs

Fed rate cuts and economic bailouts.... any intervention to help the economy = good for carry pairs

High unemployment rates globally = bad for carry pairs

High GDP globally = good for carry pairs

Also, global situations that are good for carry pairs are usually good for AUD/USD and NZD/USD.

Any major economic report these days directly affects the carry trade.

Of course the fed rate cut effects many markets, this last one was a good example for GBP/JPY. Typically I trade the majors when a rate change comes out and made quite a few pips on AUD/USD with this last one. It was only after that I noticed the extreme drop on GBP/JPY. If I had traded it instead, I would have had an extra 150 - 200 pips in the same amount of time.

Here's a good resource for the GBP/JPY:

http://www.pfxglobal.com/index.php?o...367&Itemid=167