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Japanese Yen weakness lifts GBP/JPY as rate gap stays wide

GBP/JPY traded around 210 after rebounding from an intraday low of 208.78, with Japan’s wide interest-rate gap versus the UK continuing to weigh on the yen.

Reported · Written up by our desk · Major Pairs

GBP/JPY rebounded on Thursday, moving back around 210 after dipping to an intraday low of 208.78, as the cross was driven more by broad weakness in the Japanese yen than by strength in the British pound, according to FXStreet.

Traders are weighing Japan and UK monetary policy outlooks, with the Bank of Japan gradually raising borrowing costs while remaining influenced by factors that keep other central banks hawkish. The BoJ raised its policy rate by 25 bps to 1.25% in September, though two policymakers voted to keep borrowing costs unchanged, which was viewed as slightly dovish.

FXStreet also pointed to elevated oil prices raising Japan’s import costs, alongside broader fiscal concerns that can add drag on the yen. With USD/JPY moving back toward the 160.00 level, traders are watching for the risk of Japanese intervention.

On the UK side, the Bank of England has stayed on hold this year, keeping its benchmark rate at 3.75% for a sixth straight meeting, while inflation risks remain tilted to the upside. FXStreet noted differing BoE views, including Swati Dhingra’s comments that UK financial conditions have already done much of the tightening and that winter energy prices could matter for second-round effects.

Latest closeUSD/JPY 158.89 ▲0.9%

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