British Pound gains as report of a BoJ bond-tapering pause weighs on the Japanese Yen
- GBP/JPY rebounds from a three-week low as easing Middle East tensions boost risk sentiment.
- The Japanese Yen weakens after reports that the BoJ may pause its bond-tapering program.
- Traders stay alert to intervention risks as USD/JPY trades above 160.00.
The British Pound (GBP) strengthens against the Japanese Yen (JPY) on Tuesday as easing tensions in the Middle East support risk-sensitive assets, while the Japanese Yen comes under pressure after Reuters reported that the Bank of Japan (BoJ) is considering pausing its bond-tapering program.
At the time of writing, GBP/JPY is trading around 214.72, recovering after falling to a three-week low near 213.00 on Monday.
The report suggested that the BoJ could maintain government bond purchases at the current pace of 2.1 trillion Yen ($13 billion) per month beyond the next fiscal year, effectively pausing the planned reduction in bond buying under its quantitative tightening program. Following the news, Japan's 10-year government bond yield fell 5 basis points (bps) to 2.66%, adding to pressure on the Yen.
On the monetary policy front, traders are fully pricing in a 25 bps rate hike at next week's BoJ monetary policy meeting. However, the Yen has struggled to draw support from those expectations as elevated Oil prices continue to weigh on the outlook for Japan's import-dependent economy.
At the same time, the surge in Oil prices has increased upside inflation risks globally, raising the likelihood that major central banks may need to raise interest rates.
Such a scenario could further widen the interest rate gap between Japan and other major economies, leaving the Yen on the defensive against its peers as the BoJ continues to normalize monetary policy at a gradual pace.
Nevertheless, with USD/JPY trading back above the 160.00 level, the threat of another intervention by Japanese authorities remains on the table, keeping traders cautious about building aggressive bearish positions against the Yen.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.27% | -0.44% | 0.02% | -0.11% | -0.07% | -0.46% | -0.25% | |
| EUR | 0.27% | -0.15% | 0.30% | 0.17% | 0.24% | -0.16% | 0.06% | |
| GBP | 0.44% | 0.15% | 0.43% | 0.34% | 0.36% | -0.00% | 0.20% | |
| JPY | -0.02% | -0.30% | -0.43% | -0.12% | -0.08% | -0.47% | -0.25% | |
| CAD | 0.11% | -0.17% | -0.34% | 0.12% | 0.04% | -0.33% | -0.13% | |
| AUD | 0.07% | -0.24% | -0.36% | 0.08% | -0.04% | -0.37% | -0.17% | |
| NZD | 0.46% | 0.16% | 0.00% | 0.47% | 0.33% | 0.37% | 0.20% | |
| CHF | 0.25% | -0.06% | -0.20% | 0.25% | 0.13% | 0.17% | -0.20% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Author
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
