GBP/JPY saw a 0.72% increase on Wednesday as the Japanese Yen continued to weaken. Central bank discussions took the spotlight in the absence of significant data. The Bank of England (BoE) remains focused on inflation data for future decisions.
The relentless pressure on the Yen pushed GBP/JPY to new 16-year highs, surpassing 207.80 on Wednesday. With little data coming from Japan, the Yen remains at a disadvantage due to a significant rate differential. Market speculations about a potential rate cut from the BoE boosted the Pound Sterling.
Despite some cautious remarks from BoE officials, expectations of an August rate cut strengthened the GBP. The UK’s inflation progress remains a concern for the central bank. Thursday will bring UK Industrial and Manufacturing Production figures for May, which could impact rate cut expectations.
On the technical side, GBP/JPY continues to break into new highs, showing consistent gains for the past several weeks. Charts indicate strong bullish momentum for the pair.
The Japanese Yen’s value is influenced by various factors, including the Bank of Japan’s policies, bond yields differentials, and risk sentiment among traders. The BoJ’s ultra-loose monetary policy has led to a depreciation of the Yen against other major currencies. The Yen is also considered a safe-haven investment during times of market turmoil.
Overall, GBP/JPY remains strong as the Yen weakens, with market sentiment and central bank actions driving the currency pair’s movements.