• GBP/JPY attracts sellers for the second straight day amid a modest JPY uptick.
• BoJ rate hike bets and rising geopolitical tensions underpin the safe-haven JPY.
• The broader fundamental backdrop warrants some caution for bearish traders.

The GBP/JPY cross turns lower for the second straight day on Wednesday and moves away from its highest level since August 2008, around the 212.15 region, touched the previous day. Spot prices, however, lack follow-through selling and currently trade around the 211.20 area, down just over 0.10% for the day.

Against the backdrop of the Bank of Japan's (BoJ) hawkish outlook, rising geopolitical tensions benefit the safe-haven Japanese Yen (JPY) amid fears about government intervention and act as a headwind for the GBP/JPY cross. In fact, BoJ Governor Kazuo Ueda said on Monday that the central bank will continue raising rates if economic and price developments move in line with its forecasts.

Meanwhile, geopolitical tensions escalated after the US launched land strikes on Venezuela. Adding to this, US President Donald Trump openly signaled that Colombia and Mexico could also face US military action as part of a widening campaign against criminal networks and regional instability. Moreover, the White House said on Tuesday that Trump is discussing options for acquiring Greenland.

The JPY bulls, however, might refrain from placing aggressive bets amid the uncertainty over the likely timing of the next BoJ rate hike and concerns about Japan's fiscal situation. The British Pound (GBP), on the other hand, draws support from a softer US Dollar (USD) and reduced bets for more aggressive policy easing by the Bank of England (BoE) this year. This, in turn, could support the GBP/JPY cross.

In the absence of any relevant market-moving economic releases, the supportive fundamental backdrop backs the case for the emergence of dip-buying at lower levels and warrants caution for bearish traders. Hence, it will be prudent to wait for strong follow-through selling to confirm that the GBP/JPY cross have topped out in the near-term and positioning for any meaningful corrective slide.