The GBP/JPY hit a three-decade high at 200.60 before experiencing a significant drop. The pair covered a lot of ground, declining nearly 700 pips from the day’s high. It is believed that possible Yen intervention may have contributed to the broad-market JPY slide.
On Monday, the GBP/JPY plummeted nearly 3.5% from its 34-year peak, reaching its highest bids since August 2008 before quickly pulling back. The Bank of Japan is rumored to have intervened in the global FX markets, causing the Japanese Yen to decline across all currency markets. While official confirmation is still pending, news sources suggest that the BoJ acted while Japan was closed for the Showa Day holiday.
Monday was light on economic data for both the Yen and Pound Sterling, with low-tier data expected from the UK throughout the week. Investors are looking forward to the BoJ’s Meeting Minutes scheduled for early Thursday.
This week is short for Yen trading due to holidays in Japan. In addition to the Monday closure, markets will be closed on Thursday for Constitution Day and Friday for Children’s Day.
Guppy traders will need to wait until next week for the Bank of England’s rate call and Monetary Policy Report on Thursday.
In terms of technical outlook, the GBP/JPY saw a large trading range on Monday, peaking at 200.60 before dropping below 194.00. The pair has stabilized around 196.00, and traders are monitoring whether the bullish trend will continue. Despite facing multi-decade highs, the pair’s significant price floor is the 200-day Exponential Moving Average at 185.16.
Overall, the GBP/JPY is on track to close positively for the month, maintaining a bullish trend for most of the past 16 trading months. Technical barriers on the upside are limited due to the pair’s high levels.