• GBP/JPY attracts some sellers at the start of a new week, though it lacks follow-through.
• Reviving safe-haven demand and intervention fears boost the JPY, weighing on the cross.
• The BoE’s hawkish tilt acts as a tailwind for the GBP and should limit losses for spot prices.

The GBP/JPY cross kicks off the new week on a softer note and erodes a part of Friday's strong gains to a fresh high since August 2008 – levels just above the 211.00 mark. The downtick, however, lacks bearish conviction, with spot prices rebounding a few pips from the Asian session trough and currently trading around the 210.80-210.75 region, down less than 0.10% for the day.

Against the backdrop of persistent geopolitical uncertainties stemming from the protracted Russia-Ukraine war, concerns about renewed Israel-Iran conflict, and rising tensions between the US and Venezuela boost demand for traditional safe-haven assets. This, along with speculations that Japanese authorities would step in to stem further weakness in the domestic currency, benefits the Japanese Yen (JPY), which, in turn, is seen as a key factor weighing on the GBP/JPY cross.

Meanwhile, the Bank of Japan (BoJ) left the door open to further tightening after raising its rate to a 30-year high on Friday, though it offered little clues about the future policy path. Moreover, worries about Japan's worsening fiscal condition, aggravated by a steep rise in the Japanese government bond (JGB) yields, hold back the JPY bulls from placing aggressive bets. Apart from this, the Bank of England's (BoE) hawkish tilt supports the British Pound (GBP) and the GBP/JPY cross.

As was expected, the BoE MPC voted 5-4 to lower the benchmark interest rate by 25 basis points (bps) to 3.75%. However, a close vote split revealed differences within the committee, especially after the recent inflation surprise. This, in turn, forced investors to scale back their expectations for more aggressive easing next year. Moreover, the emergence of some US Dollar (USD) selling acts as a tailwind for the GBP and warrants caution before positioning for deeper GBP/JPY losses.

Traders now look forward to the release of the final UK Q3 GDP print for some impetus amid relatively thin trading volumes on the back of the year-end holiday season. Nevertheless, the aforementioned fundamental backdrop makes it prudent to wait for strong follow-through selling before confirming that the GBP/JPY cross has formed a near-term top around the 211.00 mark.