• The Pound dives to fresh two-month lows below 198.00 against the Yen after rejection at 198.64.
• Hopes of immediate BoJ interest rate hikes are underpinning the Yen's rallies.
• GBP/JPY bears are likely to be challenged at the 197.40 area

The British pound continues to trade lower against the Yen on Thursday. The pair has lost more than 1.2% so far this week, reaching session lows below the bottom of the trading range over the last two months, at 197.85.

The hawkish BoJ summary of opinions bolstered market hopes that the Bank of Japan is ready to increase interest rates in the coming months, and is supporting Yen rallies across the board. The UK calendar is light today,, although concerns about the UK's fiscal health remain alive, adding pressure to the British Pound.

Technical analysis: The Pound broke a key support below 197.80

The break of the 197.80-198.00 area has provided further hopes for Pound bears on Thursday. The 4-hour RSI has reached oversold levels, but the impulsive negative candle reflects an intense bearish pressure.

Pound bulls might be tested at the 197.35 intra-day level, but upside attempts are likely to find sellers. Further down, the August 7 low, at 196.25, would come into focus, ahead of the August 4 low, in the vicinity of 195.00.

To the upside, previous support at Wednesday’s lows of 197.95 is likely to test upside attempts ahead of the intra-day highs and September 30 low, at 198.55. Beyond here, the next target would be the September 30 high, at 199.30.