GBP/JPY holds steady near its highest level since January 2008, above 216.00 ahead of BoE

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The GBP/JPY enters a bullish consolidation phase near its highest level since January 2008 and holds steady above the 216.00 mark heading into the European session on Thursday.

GBP/JPY preserves its recent strong gains as economic risks due to Iran tensions undermine the JPY.
The BoJ’s hawkish pause on Wednesday and intervention fears help limit further losses for the JPY.
Traders also seem reluctant to place aggressive bets and opt to wait for the key BoE policy update.

The GBP/JPY enters a bullish consolidation phase near its highest level since January 2008 and holds steady above the 216.00 mark heading into the European session on Thursday. Bulls now seem reluctant and opt to wait for the latest Bank of England (BoE) policy update before positioning for an extension of the well-established uptrend.

Traders have been pricing in a greater possibility of at least two interest rate hikes by the UK central bank in 2026 amid inflation risks stemming from the war-driven surge in energy prices. Hence, the focus will be on the accompanying policy statement and the post-meeting press conference, where comments from BoE Governor Andrew Bailey will be scrutinized for cues about the future policy path. The outlook, in turn, will play a key role in influencing the British Pound (GBP) and providing a fresh impetus to the GBP/JPY cross.

In the meantime, the Japanese Yen (JPY) continues with its relative underperformance amid worries that Japan's economy will come under strain in the foreseeable future due to the continued disruption of supplies through the Strait of Hormuz. In fact, shipping traffic through the strategic waterway has seen a sharp decline recently due to Iran's restrictions on movements and the US naval blockade of Iranian ports. Moreover, US President Donald Trump said on Wednesday that the blockade will continue till Iran agrees to a deal.

This, to a larger extent, overshadows the Bank of Japan's (BoJ) hawkish pause on Wednesday and undermines the JPY, acting as a tailwind for the GBP/JPY cross. In fact, three BoJ board members voted against the status quo decision on Tuesday. This, along with an upward revision of inflation forecasts, keeps a June or July rate hike firmly on the table, though it does little to impress the JPY bulls. However, speculations that Japanese authorities will step in to stem further JPY weakness keep a lid on any further gains for the cross.

Japanese Yen Price This week

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.29%	0.32%	0.63%	0.00%	0.17%	0.62%	0.60%
EUR	-0.29%		0.04%	0.26%	-0.27%	-0.12%	0.38%	0.33%
GBP	-0.32%	-0.04%		0.28%	-0.32%	-0.17%	0.32%	0.28%
JPY	-0.63%	-0.26%	-0.28%		-0.59%	-0.42%	0.12%	0.05%
CAD	-0.01%	0.27%	0.32%	0.59%		0.23%	0.72%	0.61%
AUD	-0.17%	0.12%	0.17%	0.42%	-0.23%		0.48%	0.43%
NZD	-0.62%	-0.38%	-0.32%	-0.12%	-0.72%	-0.48%		-0.05%
CHF	-0.60%	-0.33%	-0.28%	-0.05%	-0.61%	-0.43%	0.05%

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).