CFD Trading Rate Great Britain Pound vs Japanese Yen (GBPJPY)

• GBP/JPY holding above 194.50 as markets continue to sell Yen.
• BoE still stands pat on interest rates, but officials are slowly changing camps.
• Trading week to wrap up with Friday’s UK GDP print.

GBP/JPY is holding steady, churning above 194.50 as the Japanese Yen continues to soften across the board in the wake of “Yenterventions” from the Bank of Japan (BoJ). The UK’s Bank of England (BoE) held rates as markets broadly expected, but Monetary Policy Committee (MPC) votes shifted one more towards a rate cut vote.

The BoE voted 7-to-2 to keep rates in place early Thursday. Two members of the MPC voted for a rate cut, with Sir David Ramsden, Deputy Governor for Markets and Banking, joining Dr. Swati Dhingra, an external MPC member of the BoE, in voting for a 25-basis-point cut. Markets initially expected an 8-to-1 vote outcome, with Dr. Dhingra expected to be the singular rate dove.

Friday’s UK Gross Domestic Product (GDP) will round out the trading week, with markets forecasting a rebound in quarterly UK growth figures. Q1 UK GDP is expected to climb 0.4% QoQ, compared to the previous quarter’s -0.3% contraction. 

Further public appearances on Friday from BoE policymakers, including BoE Chief Economist Huw Pill and Dr. Dhingra, are expected throughout the day. 

GBP/JPY technical outlook

The Guppy is slowly churning further into bullish territory above the 200-hour Exponential Moving Average (EMA) near the 194.00 handle. The pair is building up a short-term price floor from 194.50 as the pair makes a break for 195.00. GBP/JPY is up around 1.8% since hitting a near-term price floor below 191.50 following last week’s 3% tumble from the 197.50 region.

GBP/JPY hourly chart

• GBP/JPY finds fresh highs after “Yenterventions” knocked pair lower.
• BoE rate call around the corner, UK GDP on Friday.
• BoE expected to hold rates steady, Gov Bailey speech anticipated.

GBP/JPY is slowly grinding its way back up the chart after a pair of suspected “Yenterventions” by the Bank of Japan (BoJ), but thus far no official statements have been forthcoming. The Bank of England (BoE) delivers its latest rate call in the upcoming Thursday London market session, and the bank is expected to vote in an overwhelming majority to hold rates steady.

The BoE is forecast to vote 8-to-1 in favour of holding rates steady at the UK central bank’s meeting this week, with Dr. Swati Dhingra expected to be the lone voter for an early rate cut, in-line with the voting results from the BoE’s previous meeting. Dr. Dhingra, an external member of the BoE’s Monetary Policy Committee (MPC), has been adamant that the UK central bank is drastically underestimating downside risks to the UK economy. A speech from BoE Governor Andrew Bailey will be delivering a speech 30 minutes after the MPC’s rate call.

Effects of suspected BoJ 'Yenterventions' are draining away

The BoJ is broadly believed to have stepped into global FX markets last week on two separate occasions after the Yen rose sharply last Monday and Tuesday. The BoJ remains tight-lipped on central bank operations to prop up the battered Yen (JPY), but BoJ operations reporting shows the Japanese central bank overspent on miscellaneous market operations by around nine billion Yen last week.

This Friday will round out the trading week with an update on UK Gross Domestic Product (GDP) growth. Q1 UK GDP is expected to rebound to 0.4% QoQ after the previous quarter’s -0.3% decline.

GBP/JPY technical outlook

The Guppy is up around 1.6% from the recent bottom near 191.50 after the BoJ’s suspected “Yenterventions” as markets test the Japanese central bank’s resolve. The pair has clawed its way back above the 200-hour Exponential Moving Average (EMA) at 193.94.

Despite a harsh knockdown that dragged the GBP/JPY down from a 34-year peak near 200.60, the pair is still firmly bullish, up over 8% from the year’s opening bids near 179.50.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY floundered after a late start to the week’s UK markets.
• UK Retail Sales disappoint, crimping bullish GBP momentum.
• BoE, UK GDP still on the cards this week.

GBP/JPY flubbed a bullish run at the 194.00 handle, floundering in recent technical congestion as the pair struggles to develop momentum. UK Retail Sales figures missed the mark when UK investors returned to markets after a long weekend, keeping the Pound Sterling (GBP) pinned.

All is quiet on the Japanese Yen (JPY) front after two suspected “Yenterventions” from the Bank of Japan (BoJ) recently; The BoJ has thus far refused to officially confirm or deny intervention in global currency markets in an effort to prop up the battered Yen, but BoJ financing reporting revealed the Japanese central bank overspent on ambiguous market operations by around nine billion Yen.

The Bank of England (BoE) is due this week with another rate call. The central bank of the UK is broadly expected to vote 8-to-1 for a rate hold as the BoE grapples with a wobbly inflation outlook plaguing the UK’s economy.

Later this week will also be a fresh print of UK Gross Domestic Product (GDP) figures, slated for Friday’s early London market session. UK GDP for the first quarter is expected to print at 0.4% QoQ, rebounding from the previous quarter’s -0.3% backslide.

GPB/JPY technical outlook

The Guppy is finding stiff technical resistance from the 200-hour Exponential Moving Average (EMA) just below the 194.00 handle. The pair slumped to an intraday low of 193.00 before recovering into the midrange near 193.50.

GBP/JPY is sticking close to the 50-day EMA near 191.78, riding a long-standing bullish trend despite a recent pullback from multi-decade high above the 200.00 handle. The pair is still trading well into bull country, holding above the 200-day EMA at 185.87.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY claws back recent declines, but early week remains thin.
• UK holiday Monday will see flow return on Tuesday.
• BoE set to give another rate call on Thursday, broadly expected to hold.

GBP/JPY found some room up top on Monday as markets kick off the new trading week on a quiet note. UK markets were shuttered for a holiday, and UK order volumes are expected to return at the outset of the Tuesday UK session after a long bank weekend.

The Bank of England (BoE) brings its latest rate call to the table this week, slated for Thursday. Markets are broadly forecasting that the BoE will vote 8-to-1 to keep rates unchanged. Swati Dhingra, an external member of the BoE, is expected to be the single holdout looking for a rate trim from the BoE.

Early Tuesday, we will see BRC Like-For-Like Retail Sales figures from the UK for the year ended in April. Markets are expecting UK Retail Sales growth for the year to slow to 1.6% from the previous 2.5%.

UK Gross Domestic Product (GDP) are also due this week, and QoQ GDP growth in the UK is expected to rebound to 0.4% in Q1 compared to the previous quarter’s -0.3% decline.

GBP/JPY technical outlook

The Guppy is slowly rebounding from a recent floor following two back-to-back interventions from the Bank of Japan (BoJ) to intervene on behalf of the badly battered Japanese Yen (JPY). The GBP/JPY has declined 4.6% peak-to-trough from a 34-year high of 200.60 at the end of April.

The pair has recovered some ground, climbing back above 193.00, though the pair still remains on the low side of the 200-hour Exponential Moving Average (EMA) at 194.00.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY lethargic near 192.00 handle.
• Overactive BoJ financing reports tips hat towards FX intervention.
• Coming up next week: BoE rate call, UK GDP.

GBP/JPY is trading flat near the 192.00 handle after the Bank of Japan (BoJ) is suspected of directly intervening in FX markets to prop up the battered Japanese Yen (JPY) twice in two days earlier this week. According to disclosure reporting from the BoJ, the Japanese central bank overspent on uncategorized financing operations by around 9 trillion Yen. The massive overshoot in BoJ financing operations strongly implies direct market intervention on behalf of the Yen, though no official statements have been made in either direction.

Coming up next week, The Bank of England (BoE) delivers its latest rate call and economic outlook statement, with late next week seeing a fresh update on UK economic growth with a quarterly Gross Domestic Product (GDP) update. UK QoQ GDP is currently forecast to rebound to 0.4% versus the previous quarter.

Japanese markets return to the fold after a raft of holiday observations this week, but Japanese data releases remain limited to low-tier prints. Investors will be keeping an eye out for any official statements from the BoJ on market operations in the days to come.

GBP/JPY technical outlook

The GBP/JPY kicked off the trading week hitting a 34-year peak bid of 200.60 before strong JPY activity dragged the pair down nearly 900 pips, or -4.4%, peak-to-trough, hitting a bottom bid near 191.80, and the pair has settled into a holding pattern near that level.

Despite a recent knockdown from multi-decade highs, the Guppy remains firmly planted in bull country, with the pair still trading well above the 200-day Exponential Moving Average (EMA) at 185.70. The pair is still up nearly 7% since the start of 2024, and is still a scorching 54% from the 2020 low near 124.00.

GBP/JPY hourly chart

GBP/JPY daily chart

• BoJ suspected of stepping into FX markets twice in one week.
• Market estimates suggest BoJ interventions have cost ¥9 trillion.
• Yen markets set for a quiet end to the week with Japan exchanges on holiday.

GBP/JPY has flattened back into recent lows after a second possible intervention on the Yen’s behalf from the Bank of Japan (BoJ). The pair is back down to the 192.00 handle after tumbling over 4% over two days from a 34-year peak of 200.60.

The back half of the first trading week of May sees Japanese markets largely dark for a slew of bank holidays, and markets are reeling after two possible BoJ “Yenterventions” this week, with market research suggesting the Japanese central bank spent around nine trillion Yen to support the battered Japanese Yen (JPY). BoJ market operations came in 5.5 trillion Yen above market expectations on May 1, with an additional 3.5 trillion Yen in excess BoJ financing operations expenses on May 2. No official statements are forthcoming from Japanese officials.

Pound Sterling (GBP) traders will be looking ahead to next week’s upcoming Bank of England (BoE) rate call, slated for Thursday. UK quarterly Gross Domestic Product (GDP) is also due next Friday, and there is little data of note on the Japanese economic calendar.

GBP/JPY technical outlook

The Guppy has been hammered by two possible BoJ interventions, dragging the pair from a three-decade-plus high of 200.60. The pair has tumbled back into a near-term supply zone around the 192.00 handle, with an immediate price floor baked in near 191.00.

Despite potential central bank operations, the GBP/JPY remains firmly in bullish territory in the medium-term, with the pair continuing to trade well above the 200-day Exponential Moving Average (EMA) at 185.58. The pair is still up 6.86% in 2024.

GBP/JPY hourly chart

GBP/JPY daily chart

• BoJ rumored to intervene in FX markets, but no official confirmation.
• GBP/JPY slowly drifting higher after 700-pip tumble this week.
• Data remains thin for both the UK and Japan this week.

GBP/JPY is grinding its way back up the charts on Tuesday, testing chart territory north of 197.00 after the pair got knocked down from 34-year highs at 200.60 earlier this week. The pair settled near 193.75 and now bidders are returning to the fold, propping up the Guppy despite ongoing rumors that the Bank of Japan (BoJ) directly intervened in FX markets on behalf of the beleaguered Japanese Yen (JPY).

Yen sellers shrug off possible BoJ intervention

According to reporting by Bloomberg, it is likely the BoJ injected ¥5.5 trillion into currency markets after early Tuesday’s BoJ operations reporting showed a wide discrepancy between market forecasts and the BoJ’s reported current account. Investors expected BoJ market operations to amount to approximately ¥2.1 trillion, but the final report clocked in a wide gap, showing ¥7.56 trillion in financing operations.

Markets will be looking ahead to early Thursday’s latest Monetary Policy Meeting Minutes from the BoJ as investors look for signs the BoJ will finally be pushed off of its hyper-easy monetary policy perch and begin lifting interest rates.

GBP/JPY technical outlook

The Guppy continues to grind back bullish territory despite this week’s early plunge, and the pair is testing above the 197.00 handle after breaking through a firm demand zone near 193.00 last week. GBP/JPY’s 34-year peak at 200.60 remains a key target for bidders shrugging off possible BoJ intervention.

GBP/JPY remains in the green nearly 10% in 2024, and remains pinned deep in bull country after a bullish rejection from the 200-day Exponential Moving Average (EMA) in early January near 179.00.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY rises steadily as market mood brightens, reducing flows to the safe-haven Yen. 
• Positive lending data in the UK shows credit remains ample. 
• BRC Shop Price Index shows disinflation in the UK but not enough to prompt BoE into action, say BBH analysts.
   

GBP/JPY trades over a third of a percentage point higher at just above 197 on Tuesday, drifting up after the steep correction of the previous day which saw the pair fall from a peak of 200 to a low of the day in the 193s. 

The sudden one-day decline was put down to the Japanese authorities intervening in Forex markets to prop up the depreciating Japanese Yen (JPY).

Yet Japan's top currency diplomat, Masato Kanda, refused to confirm this was the case on Tuesday morning, saying simply that the Ministry of Finance will release figures on currency intervention at the end of May.  

He also repeated his warnings about the risks of an excessive weakening of the Japanese Yen (JPY), adding “Excessive FX moves could impact on daily lives,” and, we “Need to take appropriate actions on FX.”

GBP/JPY floats higher on “mean reversion” and buoyant market sentiment

GBP/JPY's bounce on tuesday seems more due to a “mean reversion” effect than anything driven by any macro-economic data releases, and the bounce in GBP/JPY echoes similar rebounds in most Yen pairs. 

As a safe-haven currency, JPY tends to weaken when market sentiment is upbeat and on Tuesday the market mood was overall positive, buoyed by the recent run of tech earnings, positive GDP releases in Europe and overall easing geopolitical concerns. 

The continued interest rate differential between the UK and Japan creates an overall bullish backdrop for the GBP/JPY. 

The BoE is in no rush to cut interest rates with services inflation still rampant in the UK and in Japan the most recent batch of Tokyo CPI showed disinflation in the capital, which makes it even less likely the BoJ will raise super-low interest rates in Japan. As long as investors see more of a return parking in Pounds than Yen, the pair is destined to rise. 

Minor data causes minor effects 

The release of Japanese housing data during the Asian session on Tuesday appeared to have little noticeable effect on JPY. Housing Starts fell a bigger-than-expected minus 12.8% in March than the negative 7.6% expected but Construction Orders rose 31.4% from minus 11.0% in the previous month. Annualized Housing Starts moderated slightly to 0.76 million. 

UK lending data out a few hours later also had little immediate impact on GBP but GBP/JPY did float higher in the hours that followed. 

It is possible the UK data reflected an environment of fairly ample lending and loose credit conditions which might make it less likely that the Bank of England (BoE) will rush to cut interest rates. Keeping interest rates higher for longer is favorable for the Pound as it attracts capital inflows.   

UK Net Lending to Individuals in March came out higher than expected at 1.8 billion (GBP) when 1.7B (GBP) had been expected. The February figure was also revised up from 2.8B (GBP) to 3.0B (GBP), according to data from the BoE. 

UK Consumer Credit data out at the same time showed British shoppers borrowing more – a slightly higher 1.577 billion (GBP) in March compared to February’s 1.429B (GBP). 

UK Mortgage Approvals also rose slightly higher than expected to 61.325K when 61K had been forecast, and Money Supply (M4) rose by 0.7% in March, which was above the 0.4% forecast and the 0.6% of the previous month. 

UK inflation data unlikely to persuade BoE

At the same time a fresh batch of UK inflation data, in the form of the Consortium of British Industry’s (CBI) Shop Price Index, showed disinflationary forces at work in April. This might have been expected to weaken GBP, given lower inflation is more likely to bring forward the time when the BoE could decide to cut interest rates. 

“Shop Price annual inflation eased to 0.8% in April, down from 1.3% in March. This is below the three-month average rate of 1.4%...its lowest since December 2021,” said the BRC report. 

Additionally, non-food items entered deflationary territory, falling 0.6% in April compared to a 0.2% rise in March and a higher 0.2% three-month average. 

Food inflation in the UK decelerated to 3.4% in April, down from 3.7% in March. This was below the three-month average rate of 3.9%. It was the twelfth consecutive deceleration in the food category, according to the report. 

Although the BRC data painted a deflationary picture, analysts were quick to dismiss any impact on BoE decision-making from the report. 

“While the data is welcome, shop price disinflation is unlikely to convince the BoE to move early with policy rate cuts, as it is more concerned with high and sticky services inflation. The first cut is still seen in August,” remarked analysts at Brown Brothers Harriman. 

• GBP/JPY hit three-decade high at 200.60 before steep pullback.
• Guppy covers plenty of ground, declines nearly 700 pips from day’s high.
• Possible Yen intervention to blame for broad-market JPY slide.

The GBP/JPY tumbled nearly 3.5% from the day’s 34-year peak at 200.60, rallying to its highest bids since August of 2008 before a rapid pullback, sending the pair down nearly 700 pips on Monday before markets recovered to the 196.00 technical region.

The Bank of Japan (BoJ) is believed to have intervened in global FX markets, sending the Japanese Yen (JPY) tumbling across the entire currency market. Investors will need to wait for official confirmation, but news outlets are citing unnamed sources that the BoJ stepped into the FX market while Japan was shuttered for the Showa Day holiday.

Monday was blank on the economic calendar for both the Yen and the Pound Sterling (GBP) with UK data traders faced with strictly low-tier data all week from the UK. On the JPY side, markets will be looking ahead to the BoJ’s latest Meeting Minutes, which are slated to publish early Thursday.

It’s a short trading week for the Yen; besides the Monday holiday closure, Japanese markets will also be dark on Thursday in observation of Japan’s Constitution Day, while Friday is yet another holiday in Japan for Children’s Day.

Guppy traders will be forced to wait until next week’s rate call and Monetary Policy Report from the Bank of England (BoE), which is slated for next Thursday.

GBP/JPY technical outlook

The Guppy saw one of its largest single-day trading ranges on Monday, peaking at 200.60 before tumbling back below 194.00. The pair has settled at the 196.00 handle, and traders will be keeping a close eye on the pair as they gauge whether the pair will snap its long-running bull streak.

The GBP/JPY is still on pace to close in the green for the month. The pair has closed bullish for all but three of the last 16 consecutive trading months.

Topside technical barriers remain limited as the pair grapples with multi-decade highs, and the most meaningful price floor will be the 200-day Exponential Moving Average (EMA), far below current price action at 185.16.

GBP/JPY hourly chart

GBP/JPY daily chart
 

• GBP/JPY moves downward after paring intraday gains, a movement possibly linked to intervention by Japanese authorities.
• The Pound Sterling has strengthened amidst market expectations of BoE holding off on lowering borrowing costs until the next quarter.
• The significant and enduring interest rate differential between Japan and other nations is anticipated to persist for some time.

GBP/JPY has pared its daily losses, moving downward toward 195.00 during the Asian session on Monday. The Japanese Yen (JPY) has shown significant intraday strength, possibly influenced by intervention by Japanese authorities to support the domestic currency. However, no official announcements are being made. It's noteworthy that Japanese markets are closed on Monday for Showa Day.

Last Friday, the Bank of Japan (BoJ) opted to maintain its policy settings unchanged, which initially exerted downward pressure on the JPY. However, the prevailing optimistic market sentiment has also played a role in diminishing the safe-haven appeal of the JPY. Consequently, these factors have collectively supported the GBP/JPY cross. Moreover, the anticipation of a prolonged and substantial interest rate gap between Japan and other countries suggests a bias for further depreciation in the trajectory of the Japanese Yen (JPY).

Meanwhile, in the UK, the Pound Sterling (GBP) has strengthened amidst market expectations that the Bank of England (BoE) will likely hold off on lowering borrowing costs until the next quarter, as indicated by median forecasts in a Reuters poll.

According to Reuters, Bank of England Chief Economist Huw Pill remarked last week that interest rate cuts are still not imminent. Moreover, persistent inflationary pressures and robust domestic Purchasing Managers Index (PMI) figures have pushed back expectations for the first BoE rate cut.

• GBP/JPY continues to grind into multi-year highs.
• Japanese Yen continues to erode across the board.
• BoJ reaffirms monetary policy stance, markets pummel JPY.

GBP/JPY touched chart territory above 197.00 for the first time since September of 2008 as markets meet the Bank of Japan (BoJ) head-on and batter the Yen into decades-long lows. 

The BoJ maintained its hyper-easy monetary policy, prompting a broad-market Yen selloff. The Japanese central bank will resume large-scale Japanese government bond purchasing, and BoJ Governor Kazuo Ueda paid lip service with little action on Yen exchange rates, inflation, and interest rate forward guidance in a broadly disappointing BoJ showing.

Coming up next week, a light economic calendar from the UK, and an update on Japan’s Retail Sales figures slated for early Tuesday. Retail Trade in Japan is expected to ease to 2.2% growth for the year ended in March, down from the previous period’s 4.6%.

GBP/JPY technical outlook

With the pair trading into 16-year highs, the Guppy is breaking into extremely bullish chart territory above the 197.00 handle. The GBP/JPY is up 10.2% from 2024’s early bounce from the 200-day Exponential Moving Average (EMA) near 180.00.

The Guppy is set for a fourth consecutive month-on-month gain, and the pair is up over 50% from 2020 lows set near 130.00. 

GBP/JPY daily chart

• GBP/JPY advances to 196.00 amid uncertainty over BoJ’s interest rate outlook.
• The BoJ sees inflation rising in the coming years but has projected weak economic growth.
• UK’s firm Services PMI has deepened fears of persistent inflationary pressures.

The GBP/JPY pair extends its winning streak for the fourth trading session on Friday and rises to a historic high of 196.00. The cross strengthens after the interest rate decision from the Bank of Japan (BoJ) came in-line with market expectations.

The BoJ kept interest rates steady in the range of 0%- 0.01%. The monetary policy statement indicated that the central bank remains on track for policy normalization. The BoJ said, “It will adjust the degree of monetary easing if the underlying inflation rate rises,” instead of currently buying about 6 trillion JPY worth of Japanese Government Bonds per month.

For the economic and inflation outlook, the BoJ has forecasted weak growth and sees inflation rising in coming years. This has raised doubts among investors, as higher inflation could not be achieved by weak growth. It has also deepened uncertainty over the scope of policy tightening.

Meanwhile, softer than expected, Tokyo’s annual Consumer Price Index (CPI) data for April has deepened doubts over Japan’s inflation, which remains above the 2% target. The annual CPI rose at a slower pace of 1.8% from expectations and the prior reading of 2.6%. Tokyo CPI excluding Fresh Food softened to 1.6% from the consensus of 2.2% and the former reading of 2.4%.

On the United Kingdom front, the Pound Sterling performs strongly as strong Services PMI figures have deepened fears of persistent inflation. Higher Services PMI boosts employment and wage growth, which could stall progress in price pressures easing to the desired rate of 2%. This will prompt fears of UK interest rates remaining higher.

• GBP/JPY inches into multi-year highs as Yen softens further.
• Odds are increasing of BoJ verbal intervention spilling over into actual intervention.
• Tokyo CPI inflation, BoJ rate call approach on Friday.

The GBP/JPY pushed into fresh multi-year highs on Thursday as the pair grinds towards the 195.00 handle. The Japanese Yen (JPY) continues to weaken across the broader FX market, prompting increasing rhetoric from the Bank of Japan (BoJ) regarding direct intervention in currency markets to shore up the beleaguered JPY. The BoJ is expected to discuss intervention on the Yen’s behalf at their latest policy meeting, slated for Friday.

Japan’s Tokyo Consumer Price Index (CPI) inflation will be printing early Friday, and markets expect Japan’s leading inflation indicator to hold steady at 2.6% for the year ended in April. Core-core Tokyo CPI inflation (headline inflation less volatile food and energy prices) is expected to tick down slightly to 2.7% over the same period from the previous 2.9%.

The BoJ’s latest Interest Rate Decision and Monetary Policy Statement are also expected early Friday, where markets will look out for signals of FXC intervention from the BoJ. Markets will also look for any announced changes to the BoJ’s bond-buying program.

A press conference headed by BoJ Governor Kazuo Ueda is expected following the BoJ’s latest rate call.

GBP/JPY technical outlook

The Guppy has accelerated out of a recent technical range to approach the 195.00 handle, and the pair knocked into a fresh multi-year high. Further bullish momentum will carry the GBP/JPY into record highs, while downside pullbacks will look for a technical floor at 192.70.

The GBP/JPY is set to close for a third straight green day, and daily candles continue to hold well above the 200-day Exponential Moving Average (EMA) at 185.08.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY attracts strong follow-through buying for the third successive day on Thursday.
• The lack of decisive action and the BoJ’s uncertain rate outlook weigh heavily on the JPY.
• A modest USD downtick benefits the GBP and also contributes to the positive momentum.

The GBP/JPY cross gains strong positive traction for the third straight day on Thursday and spikes to the 195.00 neighborhood, or its highest level since August 2015 during the first half of the European session. 

Despite the recent verbal warnings by Japanese authorities, the lack of any decisive action and the Bank of Japan's (BoJ) cautious approach towards further policy tightening continues to weigh heavily on the Japanese Yen (JPY). This, along with a goodish pickup in demand for the British Pound (GBP), bolstered by a modest US Dollar (USD) weakness, turn out to be key factors that provide a strong boost to the GBP/JPY cross. 

The upward trajectory could further be attributed to technical buying following the overnight breakout through the 192.80-192.85 supply zone and a subsequent strength beyond the previous YTD peak, around the 193.50-193.55 region. Hence, it remains to be seen if the bullish run is backed by genuine buying or turns out to be a stop run as the market focus now shifts to the crucial BoJ decision, scheduled to be announced on Friday.

In the meantime, a mildly softer tone around the equity markets could offer some support to the safe-haven JPY. Apart from this, bets that the Bank of England (BoE) could start cutting interest rates, as early as June, might act as a headwind for the GBP. Heading into the key central bank event risk, the fundamental backdrop warrants some caution before positioning for a further appreciating move for the GBP/JPY cross.

• The Guppy breaks into new chart territory above 193.60, a nine-year high.
• Deflating JPY is rapidly approaching standoff territory with nervous BoJ.
• Japanese inflation figures, BoJ rate call loom ahead on Friday.

The GBP/JPY broke into a fresh nine-year high above 193.60 on Wednesday as the Pound Sterling (GBP) sees recovery bidding and the Japanese Yen (JPY) continues to weaken despite increasingly interventionist rhetoric from the Bank of Japan (BoJ). 

According to reporting from Nikkei, the BoJ is set to discuss the “impact of accelerating Yen depreciation”, a clear warning shot that the Japanese central bank could be weighing market operations to bring current Yen moves under heel. The BoJ is slated to deliver its latest Monetary Policy Report and rate call early Friday.

The Pound Sterling is enjoying a reprieve from recent selling pressure after Tuesday’s UK Services Purchasing Managers Index (PMI) recovered significant ground, bounding to 54.9 from the previous 53.1 and vaulting over the forecast downtick to 53.0. The only thing left of note on the economic docket for the UK this week will be Thursday’s GfK Consumer Confidence for April, which is expected to improve, albeit slightly, to -20 from the current -21.

Early Friday will also see the latest print of Japan’s Tokyo Consumer Price Index (CPI) inflation. Tokyo CPI inflation is expected to hold steady at 2.6% for the year ended April, while Core-core Tokyo CPI (headline inflation less volatile food and energy prices) is expected to ease slightly to 2.7% from 2.9% YoY.

GBP/JPY technical outlook

The Guppy broke through a recent technical barrier to squeeze out a fresh nine-year high just above the 193.60 level as the pair continues to price in technical support from the 190.40 region. 

GBP/JPY has been trending firmly bullish as the Yen continues to soften. The pair is up around 8% after a bullish bounce from the 200-day Exponential Moving Average near 179.00 at the start of 2024. The 200-day EMA is now breaking through the 185.00 handle as the bullish Guppy runs deeper into bull country.

GBP/JPY hourly chart

GBP/JPY daily chart

• Pound Sterling sees broad-market recovery after Services PMI beat.
• Markets shrug off a decline in the UK Manufacturing PMI.
• Japan Tokyo CPI inflation, BoJ rate call due on Friday.

The GBP/JPY pair extended gains on Tuesday, climbing towards 192.80 after an upside beat to the UK Services Purchasing Managers Index (PMI) earlier in the session. The UK Services PMI hit an eleven-month high of 54.9 for April, reversing the forecast decline to 53.0 from the previous month’s 53.1. The Pound Sterling (GBP) is gaining ground across the board as investors shrug off a miss in the Manufacturing PMI, which declined to 48.7 versus the forecast steady print of 50.3. Services comprise over 80% of the UK domestic economy compared to manufacturing’s 9.3% total output contributions.

Focus will shift to early Friday’s Tokyo Consumer Price Index (CPI) inflation print, which is expected to hold steady at 2.6%. Japan’s Tokyo CPI inflation will be followed by the Bank of Japan’s (BoJ) latest Interest Rate Decision. The BoJ’s latest Outlook Report for the first quarter is also expected around 03:00 GMT Friday. Yen traders will be looking for BoJ Governor Kazuo Ueda’s Press Conference due sometime Friday morning.

GBP/JPY technical outlook

The GBP/JPY is approaching a familiar topside technical resistance zone between 193.00 and 192.80. The Guppy has been plagued by sideways churn in the near-term as the pair cycles familiar levels in a wide range just above the 190.00 major handle.

Daily candlesticks remain trapped in April’s range, and GBP/JPY is hobbled just below nine-year highs set in March near 194.00. Despite congestion patterns, the pair remains firmly bullish, trading well north of the 200-day Exponential Moving Average (EMA) at 184.90.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY gains some positive traction in reaction to the upbeat UK Services PMI.
• A positive risk tone undermines the safe-haven JPY and further lends support.
• Intervention fears might cap the upside for the cross ahead of the BoJ on Friday.

The GBP/JPY cross attracts some dip-buying near the 190.85-190.80 region on Tuesday and climbs to a fresh daily peak during the first half of the European session. Spot prices currently trade around the 191.60 area and look to build on the overnight bounce from a one-week low.

The British Pound (GBP) gets a goodish lift following the better-than-expected release of the flash UK Services PMI, which rose to 54.9 in April from the previous month's final reading of 53.1. Apart from this, a modest US Dollar (USD) downtick, to a larger extent, overshadows an unexpected contraction in the UK manufacturing sector and turns out to be a key factor acting as a tailwind for the GBP/JPY cross.

The Japanese Yen (JPY), on the other hand, continues with its relative underperformance in the wake of the Bank of Japan's (BoJ) cautious approach towards further policy tightening. Furthermore, hopes that the Iran-Israel conflict will not escalate further remain supportive of a generally positive risk tone, which further seems to undermine the safe-haven JPY and lends additional support to the GBP/JPY cross.

Traders, meanwhile, remain on alert in the wake of speculations that Japanese authorities will intervene to prop up the domestic currency. This is holding back the JPY bears from placing aggressive bets ahead of the crucial BoJ policy decision on Friday. In the meantime, speculations about more aggressive policy easing by the Bank of England (BoE) might further contribute to capping gains for the GBP/JPY cross.

• Guppy recovers near-term after drop into 190.40.
• Thin data leaves the Pound Sterling exposed to further downside.
• Coming up this week: UK PMIs, Japanese Tokyo CPI inflation.

The GBP/JPY pair backslid into familiar lows near 190.40 as Pound Sterling (GBP) traders continue to look out for multiple rate cuts from the Bank of England (BoE) in 2024. Interest rate futures are currently pricing in a first cut from the UK’s central bank in July of this year, with at least two follow-up rate trims expected before the end of the year. Rate futures markets previously anticipated two cuts total in 2024, with the first initially pegged for August.

The S&P Global Purchasing Managers Indexes for the UK in April are slated to print early in the Tuesday market session. Markets anticipate a steady hold at 50.3 in the Manufacturing component. The Services component is expected to ease, albeit slightly, to 53.0 from 53.1.

Japan’s Tokyo Consumer Price Index (CPI) will print early Friday, with investors expecting YoY Tokyo CPI inflation to hold steady at 2.6%. The Bank of Japan’s (BoJ) latest Monetary Policy Statement will also occur sometime early Friday, with the BoJ’s Outlook Report for the first quarter expected around 03:00 GMT.

GBP/JPY technical outlook

The Guppy’s chart churn continues, with notable GBP weakness poking through. A near-term floor has been priced in near 190.40, with a heavy congestion zone built into the charts between 192.80 and 192.00.

Longer-term, the GBP/JPY pair is resting on the high end of an extremely bullish run up the charts. The pair trades well above the 200-day Exponential Moving Average (EMA) at 184.82, and the Guppy is sticking close to nine-year highs set in March above 192.50.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY drops 0.56%, as rising Israel-Iran tensions drive safe-haven flows to the Yen.
• Though lower, the pair stays bullish above the Ichimoku Cloud, with recovery possible upon reclaiming 192.00.
• Watch key levels: Immediate support at the Kijun Sen at 191.06, with potential further drops towards 190.55.

After consolidating around 192.00 for the last three days, the GBP/JPY finally tumbled to the 191.00 handle. A flight to safe-haven assets spurred by an escalation of the Israel-Iran conflict boosted the Japanese Yen (JPY) to the detriment of the Pound Sterling. At the time of writing, the cross has lost 0.56% and trades at 191.19.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY remains above the Ichimoku Cloud (Kumo), suggesting the pair is bullish. Despite sliding below key support levels, like the Tenkan and Kijun Sen, the 50-day moving average (DMA), and hitting a daily low of  190.29,  the pair resumed its recovery to the current exchange rates.

For a bullish continuation, traders must reclaim 192.00 before breaking the next resistance area at 192.80. Once cleared that would expose the 193.00 psychological level, followed by the year-to-date (YTD) high at 193.54.

On the other hand, if the pair slips below the Kijun Sen level at 191.06, that would exacerbate a drop below the confluence of an upslope support trendline and the 50-day moving average (DMA) at 190.55.

GBP/JPY Price Action – Daily Chart