GBP/JPY falls below 196.50 as BoE eyes quarter basis point rate cut
|- GBP/JPY continues to struggle following the UK’s Halifax House Prices data.
- The Bank of England is widely expected to deliver a 25 bps interest rate cut on Thursday.
- Trump announced plans to impose an additional 15% tariff on all imports from Japan.
GBP/JPY depreciates after registering gains in the previous two successive sessions, trading around 196.30 during the European hours on Thursday. The currency cross remains subdued following the release of Halifax House Prices from the United Kingdom (UK). Traders await the Bank of England’s (BoE) interest rate decision due later in the day.
The UK’s Halifax House Prices climbed by 2.4% year-on-year in July, following the previous gain of 2.7%. The reading marked the softest annual increase since July 2024. Meanwhile, the monthly prices rose 0.4%, surpassing the expected 0.3% increase.
The Pound Sterling (GBP) struggles as the Bank of England (BoE) is poised to deliver a 25 bps interest rate cut in August. The median market forecasts expect the Monetary Policy Committee (MPC) to vote 7-to-3 in favor of a quarter-point trim, bringing the BoE’s main reference rate down to 4.0% from 4.25%. The BoE Monetary Policy Report will also be eyed to assess the prospects for UK inflation over the following two years.
The GBP/JPY cross depreciates as the Japanese Yen (JPY) advances despite renewed tariff concerns. The upside of the JPY could be limited as the US President Donald Trump said that he would impose an additional 15% tariff on all Japanese imports, as Asahi newspaper cited a White House official.
Traders remain uncertain over the Bank of Japan’s (BoJ) monetary policy outlook. Japan’s central bank decided to keep its interest rates unchanged. However, the BoJ raised its inflation forecast and highlighted the increasing downside risks from global trade tensions.
Economic Indicator
BoE Interest Rate Decision
The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Read more.Next release: Thu Aug 07, 2025 11:00
Frequency: Irregular
Consensus: 4%
Previous: 4.25%
Source: Bank of England
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.