GBP/JPY dives to nearly two-month low, around mid-209.00s amid notable JPY strength
- GBP/JPY attracts heavy selling for the third straight day amid a combination of negative factors.
- Prospects for further BoJ interest rate hikes continue to underpin the JPY amid intervention fears.
- UK political jitters contribute to the GBP’s underperformance and back the case for further losses.
The GBP/JPY cross prolongs its weekly downtrend for the third consecutive day and drops to its lowest level since December 19 during the Asian session on Wednesday. Spot prices currently trade around mid-209.00s, down nearly 0.50% for the day, and seem vulnerable to slide further.
Japanese Prime Minister Sanae Takaichi's ruling Liberal Democratic Party (LDP) secured a landslide victory in the lower house election on Sunday, removing domestic political uncertainty and paving the way for more fiscal stimulus. Investors now seem hopeful that Takaichi's expansionary policies will boost the economy and prompt the Bank of Japan (BoJ) to stick to its hawkish stance. This, in turn, continues to underpin the Japanese Yen (JPY), which has been a key factor behind the GBP/JPY pair's fall since the beginning of this week.
The British Pound (GBP), on the other hand, continues with its relative underperformance on the back of concerns around UK Prime Minister Keir Starmer's leadership, especially after the resignation of his chief aide, Morgan McSweeney. Moreover, the leader of the Scottish Labour Party called for Starmer's resignation, adding a layer of uncertainty against the backdrop of the Bank of England's (BoE) future rate cut signal. This marks a significant divergence in comparison to prospects for further BoJ tightening and favors the GBP/JPY bears.
Even from a technical perspective, a break below the 50-day Simple Moving Average (SMA) for the first time since November 2025 validates the near-term negative outlook and backs the case for further losses. Moreover, fears that Japanese authorities will intervene to support the JPY should keep a lid on the GBP/JPY pair's attempted recovery in the absence of any relevant market-moving economic releases from the UK. Hence, some follow-through weakness towards testing sub-209.00 levels, en route to the 208.20-208.15 support, looks like a distinct possibility.
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.80% | -0.51% | -2.64% | -1.08% | -1.52% | -0.76% | -1.39% | |
| EUR | 0.80% | 0.29% | -1.90% | -0.26% | -0.73% | 0.04% | -0.60% | |
| GBP | 0.51% | -0.29% | -1.89% | -0.58% | -1.02% | -0.25% | -0.89% | |
| JPY | 2.64% | 1.90% | 1.89% | 1.64% | 1.18% | 1.98% | 1.21% | |
| CAD | 1.08% | 0.26% | 0.58% | -1.64% | -0.34% | 0.34% | -0.31% | |
| AUD | 1.52% | 0.73% | 1.02% | -1.18% | 0.34% | 0.78% | 0.13% | |
| NZD | 0.76% | -0.04% | 0.25% | -1.98% | -0.34% | -0.78% | -0.64% | |
| CHF | 1.39% | 0.60% | 0.89% | -1.21% | 0.31% | -0.13% | 0.64% |
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
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
