GBP/JPY Dips Back Under 200 as Politics & Bond Fears Stir the Market
The GBP/JPY pair jumped to about 200.35, marking its highest level since July 2024—but it didn’t hold, sliding back just below the big 200.00 mark, though still up roughly 0.4% for the day.
The Japanese yen weakened sharply after news that Prime Minister Shigeru Ishiba plans to resign. This political shake-up overshadowed optimism about the US-Japan trade deal and an upward revision of Japan’s Q2 GDP.
New figures show Japan’s economy grew an annualized 2.2% in April–June—better than the earlier 1.0% estimate—and rose 0.5% quarter-on-quarter, above the expected 0.3%.
That stronger GDP reading has revived hopes for a Bank of Japan (BoJ) rate hike before year-end, which helped limit further yen losses.
Meanwhile, the British pound came under pressure. A stronger US dollar and worries over the UK’s upcoming Autumn Budget hurt the GBP, which undercut a firmer move higher for GBP/JPY—despite the Bank of England (BoE) holding fire on rate cuts amid persistent inflation fears.
Impact:
The pair might push above 200 if yen weakness continues and BoJ stays hawkish. But UK fiscal jitters could possibly cap gains and spark pullbacks.
