Sterling recovers against yen ahead of Andrew Bailey's speech

Sterling rose in European trade, leading positive currencies this week away from six-week lows against yen amid improving risk appetite in the markets. 

Banking concerns calmed down as authorities continue to support the banking sector, while Deutsche Bank's stock rebounds strongly. 

Investors now await an important speech by Bank of England Andrew Bailey in London, expected to include clues on the future developments of the UK monetary policies. 

GBP/JPY rose 1.1% to 161.42, with a session-low at 159.59, after losing 0.6% on Friday against yen, plumbing six-week lows at 158.26. 

Improving Sentiment 

Most stock markets in Asia and Europe rebounded as risk sentiment improved markedly with concerns about the banking sector subsiding. 

In the US, authorities continue to take measures to underpin the US banking sector and restore confidence. 

US authorities believe the banking sector is strong and flexible despite ongoing pressure on some institutions. 

Authorities also study an emergency lending program to banks to support struggling banks like First Republic. 

Already, the First Citizens BankShares agreed to purchase Silicon Valley Bank in a deal valued at $16.5 billion that carries all of the bank's deposits and loans. 

In Europe, ECB President Christine Lagarde told EU leaders the banking system remains strong. 

Deutsche Bank rose over 7% on Monday after a 9% drop on Friday to five-month lows as costs for insuring the German bank's loans surged.