British Pound holds around 212.00 against Yen, near two-month high, as bulls await Thursday’s BoE meeting

Sterling’s underlying strength keeps GBP/JPY on a positive footing on Tuesday.
With intervention a risk, JPY bears remain cautious, limiting the cross’s upside.
Thursday’s pivotal BoE policy announcement also appears to be keeping traders hesitant.

The 212.00 level remains the hurdle for GBP/JPY bulls, who are waiting for a sustained move and acceptance above it before positioning for further upside. The cross is trading close to a two-month high in Tuesday’s early European session.

Easing fiscal worries after the recent UK budget updates continue to underpin the British Pound’s (GBP) relative strength. Sterling is also drawing support from growing conviction that the Bank of England (BoE) will raise interest rates on Thursday. By contrast, uncertainty about when the Bank of Japan (BoJ) will next increase rates continues to weigh on the Japanese Yen (JPY). The resulting wide interest rate differential between the UK and Japan provides support for GBP/JPY.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Pound holds firm as UK Autumn Budget preserves BoE rate expectations

The Pound’s relative resilience has been highlighted by strategists at DBS, who note that the 28 October UK Autumn Budget "did not unsettle the gilt market and market pricing for an interest rate hike at the November 5 Bank of England meeting." DBS consequently anticipates a more pronounced hawkish stance among policymakers. Referring to the previous decision, the strategists argue that, following the "6-3 vote supporting the September 17 pause, the vote split will likely be 7-2 this Thursday, with more MPC members acknowledging growing inflation risks." The expected change in the BoE’s voting balance is viewed as strengthening sterling’s appeal against the euro.

Speculation about renewed intervention by Japanese authorities to support their currency is nevertheless keeping traders alert. Japan’s Finance Minister Satsuki Katayama said on Monday that the joint FX statement with the US remains in place and that the government stands ready to counter excessive or disorderly JPY weakness. That prospect could discourage aggressive positioning and restrict GBP/JPY gains, while attention remains firmly on Thursday’s much-anticipated BoE monetary policy decision.

Even so, the fundamental backdrop appears to favour the bulls, implying that corrective declines are more likely to attract buyers and prove limited. Further sustained buying is still required to confirm the positive near-term outlook and allow GBP/JPY to extend the advance recorded over the past month or so.

Pound Sterling Posts Its Strongest Performance Against NZD Over Last 7 Days

Over the last 7 days, the British Pound (GBP) performed best against the New Zealand Dollar. The table below sets out its percentage changes against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.18%	-0.53%	0.28%	-0.36%	0.64%	1.23%	-1.29%
EUR	0.18%		-0.38%	0.46%	-0.19%	0.84%	1.44%	-1.10%
GBP	0.53%	0.38%		0.83%	0.22%	1.21%	1.82%	-0.73%
JPY	-0.28%	-0.46%	-0.83%		-0.63%	0.40%	0.97%	-1.46%
CAD	0.36%	0.19%	-0.22%	0.63%		0.99%	1.61%	-0.95%
AUD	-0.64%	-0.84%	-1.21%	-0.40%	-0.99%		0.61%	-1.93%
NZD	-1.23%	-1.44%	-1.82%	-0.97%	-1.61%	-0.61%		-2.49%
CHF	1.29%	1.10%	0.73%	1.46%	0.95%	1.93%	2.49%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read GBP (base)/USD (quote), for instance, start with the British Pound on the left and follow its row across to the US Dollar column; the intersecting cell gives the percentage change.