GBP/JPY approaches 200.00 ahead of UK Budget, BoJ policy meeting
- GBP/JPY strives to visit 200.00 ahead of key events in the United Kingdom and Japan.
- The BoJ is expected to keep interest rates steady at 0.25%.
- Investors await the UK budget to project Pound Sterling’s next move.
The GBP/JPY pair aims to extend its upside towards the psychological resistance of 200.00 in Tuesday’s European session. The cross has shown a strong rally for over six weeks as the Japanese Yen (BoJ) remains weak due to diminishing expectations that the Bank of Japan (BoJ) will hike interest rates again this year.
Japanese Yen PRICE Last 30 days
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 3.50% | 3.35% | 5.97% | 3.12% | 4.99% | 5.89% | 2.46% | |
| EUR | -3.50% | -0.16% | 2.37% | -0.41% | 1.44% | 2.29% | -0.98% | |
| GBP | -3.35% | 0.16% | 2.53% | -0.24% | 1.60% | 2.47% | -0.84% | |
| JPY | -5.97% | -2.37% | -2.53% | -2.70% | -0.91% | -0.07% | -3.27% | |
| CAD | -3.12% | 0.41% | 0.24% | 2.70% | 1.81% | 2.70% | -0.62% | |
| AUD | -4.99% | -1.44% | -1.60% | 0.91% | -1.81% | 0.87% | -2.40% | |
| NZD | -5.89% | -2.29% | -2.47% | 0.07% | -2.70% | -0.87% | -3.23% | |
| CHF | -2.46% | 0.98% | 0.84% | 3.27% | 0.62% | 2.40% | 3.23% |
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).
The BoJ has already raised its key borrowing rates by 35 basis points (bps) to 0.25% this year as inflationary pressures remain above 2% for a longer period. The central bank appears to be incapable of hiking them further amid growing doubts over sustainable economic growth. Market participants worry that the absence of a majority government in national elections could impact the growth prospects of the economy.
This week, investors will focus on the BoJ policy meeting, which is scheduled for Thursday. The BoJ is expected to leave interest rates unchanged at 0.25%. Investors will pay close attention to fresh guidance on interest rates.
Due to weakness in the Yen across the forex domain, Japan's Finance Minister Katsunobu Kato vowed to be vigilant to FX moves. "We will continue to closely monitor foreign exchange moves, including those driven by speculators, with a higher sense of vigilance," Kato said, Reuters reported.
Meanwhile, the Pound Sterling (GBP) will be influenced by the United Kingdom (UK) Autumn Forecast Statement announcement on Wednesday. The Labour Party is expected to raise taxes with a focus on increasing public spending. The UK Chancellor of the Exchequer is expected to provide strong funding for housing affordability and the National Health Service (NHS).
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
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