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GBP/JPY slips to fresh YTD low as yen outlook strengthens
The yen is gaining as traders unwind short positions ahead of rising Bank of Japan rate hike expectations for September 17 to 18.
The GBP/JPY cross fell for a second straight day, marking a fresh year-to-date low earlier in the session around the 207.00 area, according to FXStreet.
Spot prices trimmed some of the selloff and were trading in the mid-208.00s in the first half of the European session, still down 0.25% on the day.
FXStreet said the yen has been supported by expectations for the Bank of Japan to lift borrowing costs on September 17 to 18, reinforced by data showing Japan real wages rose for the seventh straight month and that the economy grew faster than initially estimated.
The outlet added that traders are also looking for the possibility of a follow-up move in December, while a modest US dollar bounce has weighed on the pound. It also noted that GBP downside may be cushioned by UK finance minister John Healey's growth agenda and commitment to fiscal discipline, even as the broader setup remains bearish for further upside.