GBP/JPY moves away from multi-month top, slides below 153.00 ahead of BoJ’s Ueda

GBP/JPY attracts sellers for the second successive day amid the post-BoJ JPY strength.
The BoJ rate-hike uncertainty and reduced bets for more BoE rate cuts to limit losses.
Traders now look to the post-meeting conference for some meaningful opportunities.

Haresh Menghani FXStreet

The GBP/JPY cross drifts lower for the second straight day on Thursday and retreats further from over a three-month peak, around the 199.80 region touched the previous day. Spot prices slide below the 198.00 mark after the Bank of Japan (BoJ) announced its decision during the Asian session, albeit remain confined in a familiar range held since the beginning of this week.

As was widely anticipated, the BoJ decided to leave monetary policy settings unchanged on the back of the political uncertainty after Sunday's snap elections in Japan. In the accompanying statement, the BoJ reiterated that it will continue to raise policy rates if the economy and prices move in line with the forecast. This, along with fears of possible government intervention and nervousness ahead of the November 5 US presidential election, drive haven flows towards the Japanese Yen (JPY) and exerts some pressure on the GBP/JPY cross.

The British Pound (GBP), on the other hand, is weighed down by the emergence of some US Dollar (USD) dip-buying, which turns out to be another factor dragging spot prices lower. That said, doubts over the BoJ's ability to hike interest rates further, along with diminishing odds for more aggressive interest rate cuts by the Bank of England (BoE), could offer some support to the GBP/JPY cross. This, in turn, warrants some caution for bearish traders and before confirming that spot prices have topped out in the near term.

Investors now look forward to the post-meeting presser where comments by BoJ Governor Kazuo Ueda should influence the JPY and provide some impetus to the GBP/JPY cross in the absence of any relevant macro releases from the UK on Thursday.

Bank of Japan FAQs

What is the Bank of Japan?

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

What has been the Bank of Japan’s policy?

The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.

How do Bank of Japan’s decisions influence the Japanese Yen?

The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.

Why did the Bank of Japan decide to start unwinding its ultra-loose policy?

A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.

Author

Haresh Menghani

FXStreet

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

AUD/USD eyes 0.7150 barrier nine-day EMA

AUD/USD inches higher after registering modest losses in the previous day, trading around 0.7130 during the Asian hours. The technical analysis of the daily chart indicates that the pair is moving sideways within the rectangle pattern, suggesting a consolidation as neither the bulls nor the bears have enough momentum to take control of the market.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold defends 200-day SMA at $4,425, but for how long?

Gold is attempting a tepid recovery toward $4,500 early Thursday, as renewed optimism in the Mideast geopolitical front calms market nerves. This cautious optimism across Asian markets weighs on Oil prices, and diminishes the US Dollar’s safe-haven appeal, helping Gold stage a decent comeback from the weekly low of $4,424.

Hyperliquid: ETF demand, capital rotation fuel HYPE rally as Bitcoin melts

Hyperliquid price sustains an upward trend near its all-time high of $75.76 on Thursday after posting 80% gains in May, while Bitcoin (BTC) retraces below $65,000, triggering a market-wide panic.

Kevin Warsh takes the Fed helm: What it means for the US Dollar

The Federal Reserve moves away from the highly predictable "forward guidance" model of the Jerome Powell era to a new “Kevin Warsh environment”, characterized by less communication, more policy surprises, and an increased focus on the Fed's complex balance sheet.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.