• GBP/JPY edges higher to near 212.00 amid weakness in the Japanese Yen.
• Both the BoJ and the BoE are expected to hold interest rates steady on Thursday.
• BoJ’s Ueda remains confident that prices and wages will continue to increase moderately.

The GBP/JPY pair edges up to near 212.00 during the early European trading session on Tuesday. The cross ticks higher as the Japanese Yen (JPY) underperforms across the board, even as Bank of Japan (BoJ) Governor Kazuo Ueda expresses confidence that prices and wages are rising moderately, and the "underlying inflation is gradually accelerating towards the central bank’s 2% target”.

These comments from BoJ’s Ueda have come ahead of the monetary policy announcement on Thursday, in which Japan’s central bank is expected to leave interest rates unchanged at 0.75%.

In the policy meeting, investors will pay close attention to comments regarding how much the Middle East conflict could hurt the economic growth. Investors would keen to know when the BoJ could deliver its another interest rate hike this year.

On the same day, the United Kingdom (UK) Office for National Statistics (ONS) will release the labor market data for three months ending January and the Bank of England’s (BoE) interest rate decision.

The labor market report is expected to show that the ILO Unemployment Rate remained steady at 5.2%, and Average Earnings Excluding Bonuses, a key measure of wage growth, cooled down to 4% Year-on-Year (YoY) from the previous reading of 4.2%.

In the monetary policy announcement, the BoE is expected to leave interest rates unchanged at 3.75%, with 7-2 majority, as surging oil prices due to supply disruption amid the war in the Middle East have de-anchored inflation expectations in the UK and the world.