Market news
06.11.2024, 08:18

GBP/JPY rises above 198.00 as traders expect BoE to deliver a nominal rate cut in November

  • GBP/JPY may appreciate further as the BoE is highly expected to deliver a 25 basis points rate cut on Thursday.
  • The Office for Budget Responsibility revised its 2025 inflation forecast to 2.6% from March's 1.5% estimate.
  • BoJ Meeting Minutes indicated that board members largely agreed to continue to raise interest rates.

GBP/JPY extends its gains for the second successive session, trading around 198.30 during the European hours on Wednesday. However, the upside potential for the GBP/JPY cross seems possible as the Bank of England (BoE) is projected to lower interest rates by only 25 basis points on Thursday.

Investor expectations now point to fewer rate cuts in 2024 compared to projections made before last week’s budget announcement. The Office for Budget Responsibility recently revised its 2025 inflation forecast, increasing it to an average of 2.6% from March's 1.5% estimate. This update aligns closely with the BoE’s August forecast, which projects inflation at 2.4% in one year, 1.7% in two years, and 1.5% in three years.

Investors will closely monitor BoE Governor Andrew Bailey's press conference for insights into how the FY2025 budget might influence inflation expectations and shape monetary policy decisions in December.

The downside for the Japanese Yen (JPY) is expected to be limited, influenced by the hawkish tone in the minutes from the Bank of Japan’s (BoJ) recent meeting. The minutes showed broad agreement among board members to continue raising interest rates, as inflation and economic conditions appear to support the central bank's policy objectives.

The Jibun Bank Japan Services Business Activity Index fell to 49.7 in October, down from 53.1 in September, signaling a decline in services activity. This marks the first contraction since June, although it was marginal, with companies reporting slower sales.

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Read more.

Next release: Thu Nov 07, 2024 12:00

Frequency: Irregular

Consensus: 4.75%

Previous: 5%

Source: Bank of England

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location