• GBP/JPY attracts some buyers after touching a one-week trough earlier this Monday.
• Intervention fears and BoJ rate hike bets underpin the JPY, capping gains for the cross.
• The UK political turmoil further warrants caution before positioning for further gains.

The GBP/JPY cross stages a modest recovery from over a one-week low, around the 213.30 region touched earlier this Monday, and sticks to modest intraday gains through the first half of the European session. Spot prices, however, remain below the 214.00 mark, warranting caution for aggressive bulls amid mixed cues.

The Japanese Yen (JPY) continues with its struggle to attract any meaningful buyers amid worries that Japan's economy will remain under strains due to the Middle East conflict and the continued disruption of supplies through the Strait of Hormuz. The British Pound (GBP), on the other hand, draws some support from a modest US Dollar (USD) downtick. These turn out to be key factors acting as a tailwind for the GBP/JPY cross.

The JPY bears, however, seem hesitant amid speculations that Japanese authorities will step in again to prop up the domestic currency. Moreover, data released earlier today showed that Japan’s economy expanded by 0.5% in the first quarter, outpacing consensus estimates and bolstering bets that the Bank of Japan (BoJ) will raise interest rates at its June 15-16 meeting. This helps limit JPY losses and might cap the GBP/JPY cross.

Meanwhile, UK Prime Minister Keir Starmer's authority has been severely shaken following the resignations of junior ministers, fueling political uncertainty. This, in turn, might continue to undermine the GBP and contribute to keeping a lid on the GBP/JPY cross. In the absence of any relevant market-moving economic releases, the fundamental backdrop suggests that any further intraday move is likely to be solid into and remain limited.