GBP/JPY has reached a fresh 16-year high above 204.00, hitting 204.75 on Monday as the Yen weakens. The Bank of Japan’s intervention efforts have been ignored by investors, leading to the Yen’s decline. With the BoJ sticking to an easy monetary policy stance, the interest rate gap between the Yen and other major currencies remains wide.
Both the Yen and Pound Sterling have sparse economic data this week, with the UK gearing up for Parliamentary elections on Thursday. Japan’s Tankan Large Manufacturing Index rose to 13.0 in Q2, while UK’s Q1 GDP exceeded expectations at 0.7% quarter-on-quarter.
GBP/JPY has surged to a 16-year peak with no major resistance levels in sight. The pair has gained 14.55% from its low in 2024 and continues to trade well above the 200-day Exponential Moving Average.
The Pound Sterling, the oldest currency in the world, is the official currency of the United Kingdom and is issued by the Bank of England (BoE). The BoE’s monetary policy decisions, based on maintaining price stability, greatly influence the value of the Pound Sterling. Economic indicators like GDP, PMIs, and employment data also impact the GBP’s value.
The Trade Balance is another crucial indicator for the Pound Sterling, measuring the difference between exports and imports. A positive Trade Balance strengthens a currency, while a negative balance weakens it.