GBP/JPY falls as Yen firms on hawkish BoJ remarks
작성자 Vishal Chaturvedi
게시일: 26 Feb 2026 | 수정일: 26 Feb 2026
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GBP/JPY snaps a two-day winning streak on Thursday as hawkish signals from the Bank of Japan (BoJ) strengthen the Japanese Yen (JPY), putting pressure on the British Pound (GBP).
- GBP/JPY retreats as BoJ hawkish signals lift the Japanese Yen.
- Markets price April as the most likely timing for the next BoJ move.
- BoE rate-cut bets build after Bailey says March move is a “genuinely open question.”
GBP/JPY snaps a two-day winning streak on Thursday as hawkish signals from the Bank of Japan (BoJ) strengthen the Japanese Yen (JPY), putting pressure on the British Pound (GBP). At the time of writing, the cross trades near 211.40 after briefly slipping below the 211.00 handle earlier in the European session.
BoJ board member Hajime Takata, known for his hawkish stance, renewed his call for further rate increases. Takata said the BoJ should “make a further gear shift” on interest rates and communicate under the assumption that its price stability target is almost achieved.
Takata added that the pace of future rate hikes will depend on economic conditions, price and financial market developments at the time. He cautioned that policymakers must carefully monitor the risk that divergence between Japan’s monetary policy stance and other major economies could trigger heightened volatility in financial markets, particularly in foreign exchange.
Meanwhile, BoJ Governor Kazuo Ueda said in an interview with the Yomiuri newspaper that the central bank will review incoming data at its March and April meetings to determine the appropriate path for interest rates.
These developments kept the prospect of further rate hikes on the table, helping the Japanese Yen steady after coming under significant pressure earlier this week following reports that Prime Minister Sanae Takaichi had expressed concerns about additional tightening.
According to a BHH report, swap markets price in less than a 10% chance of a 25 bps hike in March, while assigning roughly 70% odds to an April increase. BHH expects the BoJ to resume tightening at the April 28 meeting, following the conclusion of the Shunto spring wage negotiations, which typically wrap up by mid-March.
In contrast to the BoJ’s hawkish stance, expectations are building that the Bank of England (BoE) could cut interest rates as soon as March, amid softer UK inflation and signs of weakness in the labor market.
Speaking before Parliament’s Treasury Committee on Tuesday, Governor Andrew Bailey said that a rate cut at the March 19 meeting remains “a genuinely open question.”
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
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