British Pound moves away from YTD low as Yen consolidates hawkish BoJ-inspired rally
The GBP/JPY cross gains some positive traction on Thursday and moves away from the year-to-date low, around the 207.00 neighborhood, touched earlier this week. Spot prices stick to modest gains above the 208.00 mark through the early European session, though the uptick lacks bullish conviction.
The GBP/JPY currency pair rose slightly on Thursday, breaking free from a year-to-date low near 207.00. UK Finance Minister John Healey's optimistic growth approach and fiscal responsibility lent a helping hand to the British Pound (GBP). Meanwhile, the Japanese Yen (JPY) took a breather after a strong rally over the previous week.
This provided a boost to the GBP/JPY pair. However, the bias leans heavily towards the JPY bulls due to an aggressive move towards a more hawkish Bank of Japan (BoJ). Traders have priced in a 25-basis-point (bps) BoJ rate hike at the upcoming September 17-18 meeting, with a high probability of a December hike. BoJ board members Kazuyuki Masu, Hajime Takata, and Naoki Tamura have all voiced support for more aggressive rate hikes to combat inflation.
The positive economic growth and strong wage gains also bolstered the central bank's normalization plan. The market will now keep an eye on the UK's monthly GDP report on Friday, which could give a significant push to the GBP price.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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