GBP/JPY grinds back above 197.00 after suspected BoJ Yen intervention

• 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