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GBP/JPY advances to fresh two-month high, eyes 214.00 as Middle East risks hit JPY

  • GBP/JPY sticks to a positive bias for the fifth straight day and seems poised to appreciate further.
  • Economic concerns stemming from Middle East conflicts weigh on the JPY and support the pair.
  • A modest USD uptick keeps the GBP bulls on the defensive and acts as a headwind for spot prices.

The GBP/JPY cross trades with a positive bias for the fifth consecutive day and hits a fresh two-month high, around the 213.85 area, during the early European session on Friday. Spot prices remain on track to register strong weekly gains, and the supportive fundamental backdrop backs the case for an extension of the weekly uptrend.

The Japanese Yen (JPY) continues with its relative underperformance amid economic concerns stemming from instability in the Strait of Hormuz and turns out to be a key factor acting as a tailwind for the GBP/JPY cross. In fact, Iran once again shut down traffic through the strategic waterway in response to brutal Israeli attacks on Lebanon. Moreover, US President Donald Trump warned of renewed strikes if the Iran deal fails, suggesting that escalation risks remain on the table. Given that approximately 90% of Japan's crude oil imports pass through this critical waterway, investors remain worried that the Japanese economy will face significant headwinds due to rising tensions in the Middle East.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said that he has issued an instruction to start direct negotiations with Lebanon as soon as possible, addressing a key point of contention in the fragile US-Iran ceasefire. A US State Department official reportedly confirmed that talks between Lebanon and Israel will take place next week in Washington, DC. Moreover, crucial US-Iran talks are scheduled in phases between late Friday night and Saturday. This keeps alive hopes of Iran ceasefire stabilizing, which keeps a lid on Crude Oil prices and limits deeper JPY losses. Furthermore, a modest US Dollar (USD) strength weighs on the British Pound (GBP) and contributes to capping the GBP/JPY cross.

Nevertheless, the broader setup favors bullish traders and suggests that the path of least resistance for spot prices remains to the upside. Hence, any corrective pullback could be seen as a buying opportunity and is more likely to remain limited.

(This story was corrected on April 10 at 08;14 GMT to say in the first paragraph that the GBP/JPY cross hits a fresh two-month high, around the 213.85 area, not one-month high, around the 133.85 area.)

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.11%0.08%0.16%0.13%0.29%0.31%-0.06%
EUR-0.11%-0.03%0.06%0.00%0.17%0.20%-0.17%
GBP-0.08%0.03%0.11%0.05%0.22%0.24%-0.15%
JPY-0.16%-0.06%-0.11%-0.05%0.12%0.10%-0.27%
CAD-0.13%-0.01%-0.05%0.05%0.15%0.17%-0.20%
AUD-0.29%-0.17%-0.22%-0.12%-0.15%0.02%-0.36%
NZD-0.31%-0.20%-0.24%-0.10%-0.17%-0.02%-0.38%
CHF0.06%0.17%0.15%0.27%0.20%0.36%0.38%

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

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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