GBP/JPY rallies beyond 211.00, over two-week top as waning BoJ rate hike bets weigh on JPY
- GBP/JPY attracts buyers for the second consecutive day on Wednesday amid a weaker JPY.
- Delayed BoJ rate hike bets undermine the JPY, while renewed USD selling benefits the GBP.
- Dovish BoE expectations could cap the cross amid JPY intervention fears and geopolitical risks.
The GBP/JPY cross is seen building on the previous day's strong move up and gaining some follow-through positive traction for the second consecutive day on Wednesday. The momentum remains unabated through the first half of the European session and lifts spot prices above the 211.00 mark or over a two-week top in the last hour.
The Japanese Yen (JPY) continues to be undermined by reports that Japan's Prime Minister Sanae Takaichi was apprehensive about more rate hikes in a meeting last week with the Bank of Japan (BoJ) Governor Kazuo Ueda. Moreover, the government nominated two reflationists to join the BoJ board, forcing investors to trim expectations about the speed of interest rate hikes. This, along with a generally positive risk tone, further dents the JPY's safe-haven status and pushes the GBP/JPY cross higher.
Meanwhile, the US Dollar (USD) meets with a fresh supply amid concerns about the economic fallout from US President Donald Trump’s erratic trade policies. This, in turn, benefits the British Pound (GBP), which further contributes to the currency pair's positive move. Apart from this, the strong move up could further be attributed to some technical buying following Tuesday's breakout through a trading range hurdle near the 209.50-209.60 region, though the upside for the GBP/JPY cross seems capped.
Investors now seem convinced that the Bank of England (BoE) will cut interest rates as early as the March meeting, which marks a significant divergence in comparison to the BoJ's hawkish tilt. Apart from this, geopolitical risks could support the safe-haven JPY amid speculations that Japanese authorities could step in to stem further weakness. This, in turn, might hold back traders from placing aggressive bullish bets around the GBP/JPY cross and keep a lid on any further appreciating move.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.14% | -0.13% | 0.20% | -0.09% | -0.52% | -0.17% | -0.05% | |
| EUR | 0.14% | 0.01% | 0.35% | 0.05% | -0.37% | -0.02% | 0.10% | |
| GBP | 0.13% | -0.01% | 0.34% | 0.04% | -0.38% | -0.04% | 0.08% | |
| JPY | -0.20% | -0.35% | -0.34% | -0.28% | -0.71% | -0.37% | -0.24% | |
| CAD | 0.09% | -0.05% | -0.04% | 0.28% | -0.42% | -0.08% | 0.05% | |
| AUD | 0.52% | 0.37% | 0.38% | 0.71% | 0.42% | 0.35% | 0.47% | |
| NZD | 0.17% | 0.02% | 0.04% | 0.37% | 0.08% | -0.35% | 0.12% | |
| CHF | 0.05% | -0.10% | -0.08% | 0.24% | -0.05% | -0.47% | -0.12% |
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.
