British Pound retreats from one-month top vs Yen; Mideast risks help limit downside

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The GBP/JPY cross drifts lower on Wednesday, snapping a three-day winning streak to the 215.50 area or over a one-month high touched the previous day.

GBP/JPY attracts some sellers on Wednesday, though it lacks follow-through amid mixed cues.
A broadly firmer USD weighs on the GBP, which is seen exerting some pressure on spot prices.
Economic risks due to the Mideast conflict counter intervention warning and undermine the JPY.

The GBP/JPY cross drifts lower on Wednesday, snapping a three-day winning streak to the 215.50 area or over a one-month high touched the previous day. Spot prices remain depressed through the early European session and currently trade above the 215.00 psychological mark, though downside potential seems limited.

The US Dollar (USD) continues to attract some safe-haven flows amid the uncertainty surrounding US-Iran negotiations. This is seen exerting some downward pressure on the British Pound (GBP), which, in turn, prompts some selling around the GBP/JPY cross. The intraday downtick, however, lacks bearish conviction as economic concerns stemming from the Middle East conflict continue to undermine the Japanese Yen (JPY).

Shipping traffic through the critical Strait of Hormuz remains limited amid the lack of progress in US-Iran peace talks. Adding to this, the continuation of a US blockade of Iranian ports fuel worries that Japan's economy will remain under strains due to the continued disruption of energy supplies through the strategic waterway. This holds back the JPY bulls from placing aggressive bets and lends support to the GBP/JPY cross.

Even verbal intervention from Japan’s Finance Minister Satsuki Katayama, saying that authorities are ready to act on the foreign exchange if required, failed to provide any respite to the JPY bulls. This, in turn, suggests that the path of least resistance for the GBP/JPY cross remains to the upside. Hence, any meaningful corrective pullback might still be seen as a buying opportunity and is likely to be limited, warranting caution for bearish traders.

Japanese Yen Price Last 30 days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		1.14%	1.12%	2.10%	1.95%	0.72%	-0.10%	1.08%
EUR	-1.14%		-0.04%	0.89%	0.79%	-0.36%	-1.22%	-0.03%
GBP	-1.12%	0.04%		0.95%	0.83%	-0.33%	-1.19%	0.00%
JPY	-2.10%	-0.89%	-0.95%		-0.07%	-1.28%	-2.06%	-0.99%
CAD	-1.95%	-0.79%	-0.83%	0.07%		-1.18%	-1.98%	-0.82%
AUD	-0.72%	0.36%	0.33%	1.28%	1.18%		-0.86%	0.32%
NZD	0.10%	1.22%	1.19%	2.06%	1.98%	0.86%		1.20%
CHF	-1.08%	0.03%	-0.00%	0.99%	0.82%	-0.32%	-1.20%

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).