Speculation that Bank of Japan intervened in the FX markets helped the GBP/JPY pair recover from multi-month lows to trade around 162.30 levels in the US session. Focus on US stocks The pair is at the mercy of the action in the US stocks, which opened lower and are trading with 1.5% losses. However, this was expected, given the rout in the European stocks. Hence, safe havens like JPY have not seen a fresh spike. Nevertheless, the risk-off in the US equities is capping the recovery in the GBP/JPY cross. Speculation of BOJ easing is also capping upside in the JPY to some extent. GBP/JPY Technical Levels The immediate resistance is seen at 163.98 (Jan 20 low), which if taken out could see the cross test major hurdle at 165.00 (hourly 50-MA). On the other hand, a break below 159.81 (daily low) could see the cross extend the drop to 158.05 (July 2009 close). For more information, read our latest forex news.