GBP/JPY Price Forecast: Momentum stabilizes, but lacks bullish conviction
GBP/JPY edges higher on Monday as the Japanese Yen (JPY) remains under pressure across the board in thin trading conditions. Japanese markets are closed until Wednesday for the country’s Silver Week holidays.
GBP/JPY price stabilized on Monday as the Japanese Yen remained under pressure in thin trading conditions. The cross traded around 210.55, extending gains for a second consecutive day. Japanese Yen was the strongest against the Canadian Dollar, while the Bank of Japan (BoJ) had raised its policy rate by 25 basis points to 1.25% on Friday.
The Bank of England's (BoE) unchanged interest rates also weighed on the British Pound (GBP). Despite this, persistent Yen weakness overshadowed the pressure on Sterling, supporting GBP/JPY. The Yen's decline has brought intervention risk back into focus, with speculation that the BoJ could step in again if the currency weakens rapidly.
Looking ahead, economic data from the UK and Japan will be closely watched, alongside speeches from BoE officials for clues about the interest-rate outlook. The pair is currently hovering just below the 38.2% Fibonacci retracement at 210.65, with key resistance at 211.76 and 212.87, and support at 209.27 and 207.05.
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