GBP/JPY Price Forecast: Retraces from four-month high above 196.50

GBP/JPY retraces to near 194.45 from the four-month high of 196.50 as the Japanese Yen outperforms.
BoJ’s Uchida expressed confidence in more interest rate hikes ahead.
The UK economy is expected to have grown strongly by 0.6% in the January-March period.

Sagar Dua FXStreet

The GBP/JPY pair corrects to near 194.45 during European trading hours on Wednesday from its four-month high of 196.40 posted earlier in the day. The cross retraces sharply as the Japanese Yen (JPY) strengthens across the board after comments from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida indicated that hopes of further interest rate hikes are still alive despite global economic uncertainty in the wake of tariffs announced by United States (US) President Donald Trump.

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.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.32%	-0.21%	-0.98%	-0.00%	0.04%	-0.12%	-0.41%
EUR	0.32%		0.12%	-0.66%	0.32%	0.36%	0.18%	-0.09%
GBP	0.21%	-0.12%		-0.80%	0.20%	0.24%	0.06%	-0.21%
JPY	0.98%	0.66%	0.80%		0.98%	1.02%	0.84%	0.56%
CAD	0.00%	-0.32%	-0.20%	-0.98%		0.04%	-0.12%	-0.40%
AUD	-0.04%	-0.36%	-0.24%	-1.02%	-0.04%		-0.16%	-0.45%
NZD	0.12%	-0.18%	-0.06%	-0.84%	0.12%	0.16%		-0.28%
CHF	0.41%	0.09%	0.21%	-0.56%	0.40%	0.45%	0.28%

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).

Japan’s underlying inflation and medium- to long-term inflation expectations are likely to temporarily stagnate. But even during that period, wages are expected to continue rising as Japan’s job market is very tight, Uchida said on Tuesday, Reuters reported.

Meanwhile, the Pound Sterling (GBP) trades calmly ahead of the flash United Kingdom (UK) Q1 Gross Domestic Product (GDP) data, which will be released on Thursday. The UK economy is estimated to have expanded at a robust pace of 0.6%, compared to 0.1% growth seen in the last quarter of 2024.

On the monetary policy front, the Bank of England (BoE) is expected to reduce interest rates further as the UK labor market has cooled down. The Office for National Statistics (ONS) reported that the ILO Unemployment Rate accelerated to 4.5%, as expected, from 4.4% in the three months ending February. In the same period, the economy added 112K fresh workers, significantly lower than the prior release of 206K.

GBP/JPY struggles to extend its upside above the horizontal resistance plotted from the March 27 high of 196.00. However, the outlook of the cross is still bullish as the 20-day Exponential Moving Average (EMA) slopes higher, which trades around 192.32.

The 14-day Relative Strength Index (RSI) retraces to near 60.00 from 67.00. A fresh bullish momentum would emerge if the RSI holds above the 60.00 level.

The pair could extend its upside to near the January 7 high of 198.26 and the psychological level of 200.00 after breaking above the four-month high of 196.40.

On the flip side, a downside move by the pair below the May 6 low of 190.33 will expose it to the March 11 low of 188.80, followed by the February 7 low of 187.00.

GBP/JPY daily chart

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

GBP/USD keeps the bull run intact, still below 1.3500

GBP/USD manages to trade with acceptable gains around 1.3480 on Thursday. Conflicting signals from US and Iranian officials over a potential deal have kept markets cautious and capped Cable’s upside, while investors avoid taking sizeable positions ahead of Friday’s crucial US NFP report.

EUR/USD faces some downside pressure around 1.1540

EUR/USD retreats modestly after advancing for two consecutive days, slipping below 1.1550 on Thursday. In the meantime, markets remain cautious over the prospects of a US-Iran peace agreement and the reopening of the Strait of Hormuz, keeping demand for the safe-haven US Dollar intact and preventing spot from regaining momentum.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: Sell-off persists, bears aim for $1.00 as Ripple eyes on-chain multi-signature upgrade

Ripple (XRP) remains pressured, trading below $1.05 at the time of writing on Thursday. The token has declined for the fourth consecutive day this week, reflecting lethargic sentiment in the broader cryptocurrency market despite the possibility of easing geopolitical tensions in the Middle East.

The Fed is doing the exact opposite of what it should be doing

About the Yen: The WSJ has a front-page story about how the Fed is doing the exact opposite of what it should be doing—lending dollars to Japan to buy yen. “Put simply: America is printing dollars so Japan can buy yen.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.