GBP/JPY slips toward 200.00 as traders await Tokyo CPI data
The GBP/JPY currency pair moved lower on Thursday, trading close to the 200.00 level. This drop came after the Bank of Japan (BoJ) released minutes from its July meeting, which showed that policymakers are becoming more open to raising interest rates. With Japan’s inflation still high and global uncertainty easing, investors believe the BoJ could act sooner than expected.
The Japanese Yen gained some strength against the British Pound as the central bank left its key interest rate at 0.5% but signaled that more tightening may be possible in the coming months.
On the UK side, the Pound stayed relatively steady. Markets are watching the Bank of England (BoE) closely for signs of a rate cut later this year. However, BoE policymaker Megan Greene warned against cutting rates too early, pointing out that inflation risks remain.
The main focus now is Japan’s Tokyo Consumer Price Index (CPI) data, due on Friday. Economists expect the core CPI, which excludes fresh food, to rise by 2.8% year-on-year in September, compared with 2.5% in August. A stronger reading could increase pressure on the BoJ to raise rates, while a weaker print may ease the urgency.
Impact:
If Tokyo inflation comes in higher than expected, the Yen might strengthen further, pushing GBP/JPY lower. Markets could also assume a faster BoJ rate hike path.