The GBP/JPY pair continues to see strong buying for the third day in a row on Thursday, reaching the 195.00 level, its highest since August 2015. The Japanese Yen is under pressure due to the Bank of Japan’s uncertain rate outlook and lack of decisive action. This, combined with a slight decline in the US Dollar, is boosting the GBP and driving the positive momentum for GBP/JPY.
The recent breakout above key resistance levels and technical buying are contributing to the upward movement. However, market focus is now on the upcoming Bank of Japan decision, which could impact the direction of the pair. While softer equity markets may support the JPY, concerns about potential interest rate cuts by the Bank of England could limit the GBP’s gains.
As traders await the central bank announcements, caution is advised before taking positions on the GBP/JPY pair. The fundamental backdrop suggests a mixed outlook for the currency pair in the near term.