GBP/JPY holds near July 2008 peak, around mid-215.00s as Hormuz risks weigh on JPY

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The GBP/JPY cross trades with a positive bias for the eighth straight day and sits near mid-215.00s, close to the July 2008 swing high during the early European session on Wednesday.

GBP/JPY climbs to a fresh high since July 2008 on Wednesday, though it lacks follow-through.
Hormuz risks fuel economic concerns, undermining the JPY and offering support to the cross.
Intervention fears hold back the JPY bears from placing fresh bets, capping gains for spot prices.

The GBP/JPY cross trades with a positive bias for the eighth straight day and sits near mid-215.00s, close to the July 2008 swing high during the early European session on Wednesday.

Despite hopes of a new round of US-Iran peace talks, investors remain worried about economic headwinds stemming from the instability in the Strait of Hormuz. Given that Japan depends mostly on oil imports from the Middle East, the US blockade of Iran's ports threatens to further constrain flows through the strategic waterway. This continues to fuel concerns that Japan's economy will come under substantial strain in the foreseeable future, which has been a key factor behind the Japanese Yen's (JPY) relative underperformance and acts as a tailwind for the GBP/JPY cross.

The British Pound (GBP), on the other hand, continues to be underpinned by expectations of a more hawkish stance by the Bank of England (BoE). In fact, markets are currently pricing in a high probability of at least one, and potentially two, rate hikes this year as the war-driven surge in energy prices has raised inflation forecasts. This offers additional support to the GBP/JPY cross. That said, a greater chance of a Bank of Japan (BoJ) rate hike at the April meeting, along with intervention fears, holds back the JPY bears from placing aggressive bets and caps the currency pair.

Even from a technical perspective, the daily Relative Strength Index (RSI) is approaching overbought conditions. This further makes it prudent to wait for some near-term consolidation or a modest pullback before traders start positioning for an extension of the recent well-established uptrend. Market participants now look forward to BoE Governor Andrew Bailey's speech for a fresh impetus later today and ahead of the UK data dump on Thursday. Nevertheless, the supportive fundamental backdrop suggests that any corrective slide is likely to be bought into.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.07%	0.04%	0.10%	-0.02%	-0.32%	-0.03%	-0.00%
EUR	-0.07%		-0.02%	0.02%	-0.09%	-0.31%	-0.10%	-0.07%
GBP	-0.04%	0.02%		0.04%	-0.04%	-0.27%	-0.07%	-0.05%
JPY	-0.10%	-0.02%	-0.04%		-0.09%	-0.33%	-0.13%	-0.10%
CAD	0.02%	0.09%	0.04%	0.09%		-0.22%	-0.02%	-0.00%
AUD	0.32%	0.31%	0.27%	0.33%	0.22%		0.21%	0.24%
NZD	0.03%	0.10%	0.07%	0.13%	0.02%	-0.21%		0.03%
CHF	0.00%	0.07%	0.05%	0.10%	0.00%	-0.24%	-0.03%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).