JPY: No Breakthrough

Sterling remains on the back foot, but significantly off early lows, with GBP/JPY last trading -10 pips at Y139.58. Brexit angst still front and centre, as the dust settles after the Johnson/von der Leyen meeting, which failed to bring any immediate breakthrough.

• After a three-hour "lively and frank" conversation, the leaders agreed to move the deadline for striking a tentative accord to Sunday. Failure to reach agreement by that time would mean a no-deal scenario. As they emerged from the meeting, both made clear that the two sides remain "far apart" on the key issues.
• The FT reported that the EU is set to ban UK holidaymakers from entering the bloc after Jan 1, owing to Covid-19 safety rules. Only a handful of non-EU countries are exempted from curbs on non-essential travel into the Union, based on their low Covid-19 infection rates.
• A break above Dec 9 high of Y140.33 would turn focus to Y140.71, the high print of Dec 3 & a key near-term resistance. On the downside, losses have been limited by the 23.6% retracement of the Sep 22 - Dec 4 rally at Y138.90 today. Below there opens Dec 7 low of Y137.91.
• UK monthly economic activity indicators are due later today.