GBP/JPY Soars: Yen Weakness Fuels Bullish Breakout Towards 200

The GBP/JPY gained sharply above 197.50 on board-based Yen weakness. It hit an intraday high of 198 and is currently trading around 197.92.  Intraday trend is bullish as long as support 196.80  holds.  

The Japanese yen has been notably depreciating against major currencies, particularly the US dollar, largely due to diminished expectations for further Bank of Japan (BoJ) rate hikes in 2025. Following a modest rate increase in January 2025, the BoJ has maintained a cautious approach, keeping rates unchanged and revising downward its growth and inflation forecasts. This conservative stance, coupled with the substantial interest rate differential between Japan and economies such as the United States, continues to make the yen comparatively unattractive to investors. As a result, downward pressure on the yen persists, and unless the BoJ adopts a more assertive tightening strategy or there is a significant shift in global interest rates, the currency is likely to remain under considerable strain.

‘The GBP/JPY pair is trading above  34 and 55 and 200 EMA (Short-term) and 365 EMA (long-term) on the 4-hour chart, confirming a bullish trend.  Any violation below 197.10 indicates the intraday trend is weak. A dip to 196.75/196/195/194/193.70 is possible.  Immediate resistance is at 198 a breach above this level targets of 200/202.

Market Indicators (4- hour)

CCI (50)- Bullish

Directional movement index - Bullish

Trading Strategy:  buy on dips

 It Is good to buy on dips around 197 with SL around 196  for a TP of 200.