Sterling Strength Surges: GBP/JPY Bulls Eye Higher Highs Amid Yen Weakness

The GBP/JPY  gained slightly on board-based yen weakness. It hit an intraday high of  197.59 and is currently trading around 197.45.  Intraday trend is bullish as long as support 196.70  holds.

 Although Japanese companies have pledged a record-high average yearly pay increase of 5. 25% for 2025, official monthly figures show that nominal wage growth as of May 2025 is modest at only 1. 0% year-on-year, three months of deceleration. Meanwhile, real wages have fallen 2. 9% year-on-year, their biggest drop since 2023 and fifth straight monthly drop, as consumer inflation driven by rising food and energy prices stays at 4. 0%. While growing US tariff threats further cloud Japan's economic prospects and increase general uncertainty, this constant disparity between wage increases and inflation is eroding household purchasing power and jeopardizing consumer spending.

The GBP/JPY pair is trading above  55 and 200 EMA (Short-term) and 365 EMA (long-term) on the 15-min chart, confirming a bullish trend.  Any violation below 197 indicates the intraday trend is weak. A dip to 196.70/196.25/195.25/194/193.70 is possible.  Immediate resistance is at 197.75, a breach above this level targets of 198.35/198.80/200/202.

Market Indicators (15 min chart)

CCI (50)- Bullish

Directional movement index - neutral

Trading Strategy:  Buy

 
 It is good to buy on dips around 197.30-32 with SL around 196.70  for a TP of 198.80.