Despite the Bank of Japan’s recent move to raise interest rates by 25 basis points—a widely anticipated decision—the Japanese Yen’s strength has proven fleeting. In fact, the GBP/JPY cross has shown remarkable resilience, continuing its upward trajectory and attracting significant dip-buying interest during Friday’s Asian session.
Following a minor pullback late yesterday, the pair quickly found its footing, stalling the retreat from levels just above the formidable 209.00 mark. This renewed momentum has pushed the cross further beyond the mid-208.00s, cementing its position at a fresh high not seen since August 2008.
The market’s reaction, or rather the Yen’s muted response to the BoJ’s tightening, suggests that traders had largely priced in the policy shift. Instead, focus appears to remain on the differing monetary policy paths of the Bank of England and the BoJ, with sterling’s underlying strength continuing to dominate against a Yen that struggles to gain significant traction despite its central bank’s actions. What’s next for this bullish pair?
Source: Original Article
