• GBP/JPY returns to levels beyond 213.00 after bouncing from 211.78 lows earlier on Friday.
• The Yen spiked up during the early European session amid another alleged intervention by Japan.
• The BoE warned about the complicated combination of high inflation and lower growth.

The Pound (GBP) has turned positive on the daily chart against the Japanese Yen (JPY) on Friday, trading at levels a few pips above 213.00 at the time of writing, up from session lows at 211.78 earlier in the day.

The pair plunged about 200 pips without any clear fundamental reason during the early European trading session, with all Yen pairs depreciating simultaneously in what is likely to be the second intervention by the Japanese Ministry of Finance (MOF) in the last two days. 

A senior Japanese official had warned markets that Tokyo could act again, taking advantage of thinned trading volumes due to the May 1 Labour Day holiday, to enhance the impact, as Japan heads into the Golden Week holidays.

The pair dropped a maximum of nearly 600 pips on Thursday, although it managed to regain almost half of the lost ground by the end of the day. The Yen surged across the board, also without a clear fundamental reason to justify it, after the USD/JPY crossed the 160.00 line, a key level considered a trigger for action by the Japanese authorities.

In the UK, the Bank of England (BoE) left its benchmark interest rate on hold at the current 3.75% rate with 8 votes to 1, and Governor Andrew Bailey warned about the “most difficult combination,” referring to higher energy prices and weakening economic growth. The Pound, however, appreciated against its main currency peers following the event.