GBP/JPY Update: Yen Strength Impacts Market Dynamics Amid BoJ Rate Hikes

The GBP/JPY pared some of its gains due to the strong yen. It hit an intraday low of 191 and is currently trading around 191.64. Intraday trend is bullish as long as support 189.30 holds.

BoJ Interest Rate Decisions

BoJ has vowed to raise interest rates if inflation is to reach its target of 2%. In January 2025, the BoJ raised the short-term interest rate from 0.25% to 0.5%, the first time since 2008. Recent data showed that Japan's core inflation reached 3.0% in December 2024, and wages rose to 4.8%, which helped consumer spending. As investors anticipate further rate increases, market fluctuations have increased even more, reaching new highs in bond yields. The next meeting of the BoJ is set for March 18-19, 2025, wherein more decisions will be made.

Technical Analysis of GBP/JPY

The GBP/JPY pair is trading above 34 and 55 EMA (Short-term) and below 200 EMA (long-term) on the 4-hour chart, confirming a bearish trend. Immediate resistance is at 192; a breach above this level targets of 193/193.36/194/195/195.60/196.25/197. Downside support is at 191 with additional levels at 191/ 190/189.30/188.70/188.

Market Indicators

CCI (50)- bearish

Directional movement index - bearish

 It is recommended to sell on rallies around 192.10-15 with a stop-loss at 193 for a TP of 190