Japanese Yen weakness lifts British Pound as wide interest-rate gap bites
GBP/JPY rebounds on Thursday, supported mainly by broad-based weakness in the Japanese Yen (JPY) rather than strength in the British Pound (GBP), as traders assess the monetary policy outlooks of the Bank of Japan (BoJ) and the Bank of England (BoE).
The Japanese Yen (JPY) weakened on Thursday, bolstering the British Pound (GBP) as central banks' differing monetary policy outlooks played a key role. The Japanese Yen traded around 210 against the USD, recovering from a low of 208.78, while the British Pound remained elevated against the Yen, as traders analyzed the divergent policy paths of the Bank of Japan (BoJ) and the Bank of England (BoE).
The BoJ recently hiked its policy rate by 25 basis points to 1.25%, but two policymakers voted to keep rates unchanged, casting the decision as somewhat dovish. Japan's import costs are rising due to high oil prices and fiscal concerns, further pressuring the Yen. Meanwhile, the BoE has kept its benchmark rate at 3.75% for six consecutive meetings, suggesting a wider interest-rate gap that favors the British Pound.
Traders remain cautious about potential BoE rate hikes, with differing opinions among central bank officials. While the GBP/JPY cross has shown resilience, traders will closely monitor the risk of Japanese authorities intervening as USD/JPY approaches the psychological 160.00 level.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
