GBP/JPY Price Forecast: Can bulls reach 213.00 after retaking the 50-day SMA?

Bullish momentum in GBP/JPY strengthens as the pair clears its 50-day SMA at 210.77.
Buying pressure builds, with daily highs rising for five successive sessions.
A move through 211.00 brings 211.99 and the 200-day SMA at 212.92 into focus.

A potential test of the psychological 211.00 level is in focus as the Pound Sterling gains over 0.32% against the Japanese Yen, taking the pair above its 50-day Simple Moving Average (SMA) at 210.77.

GBP/JPY Price Forecast: Can the advance extend beyond 211.00?

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

Buyers are gaining traction in GBP/JPY, which is approaching 211.00 at the time of writing after three days of subdued trading. The cross has recorded a higher daily high in each of the past five sessions, suggesting that buying momentum is building. A gradual rise in the Relative Strength Index (RSI) also points to buyers retaining control.

The October 22 high at 211.99 would be the next target should GBP/JPY build on its advance and move above 211.00. Further up, attention turns to the 200-day SMA at 212.92 and then the 100-day SMA at 213.19.

A break beneath 209.57, the October 28 swing low, is what sellers will seek for a bearish reversal. Such a move would clear the way towards the September 25 daily low at 208.01.

GBP/JPY Daily Price Chart

Japanese Yen: Frequently asked questions

Which factors influence the Japanese Yen most?

Among the most actively traded currencies globally, the Japanese Yen (JPY) derives its value broadly from Japan’s economic performance. More specific influences include the Bank of Japan’s policy, the gap between Japanese and US bond yields, and traders’ appetite for risk, alongside other factors.

Why do Bank of Japan decisions matter for the Japanese Yen?

Currency control forms part of the Bank of Japan’s mandate, making its actions important for the Yen. Although the BoJ has occasionally intervened directly in currency markets, usually to weaken the Yen, political concerns among Japan’s main trading partners discourage frequent intervention. Between 2013 and 2024, the BoJ’s ultra-loose monetary stance weakened the Yen against its major peers as the policy gap between the Bank of Japan and other leading central banks widened. More recently, a gradual withdrawal of that ultra-loose stance has offered the Yen some support.

Why does the Japanese-US bond yield gap matter for the Japanese Yen?

By maintaining an ultra-loose monetary stance over the past decade, the BoJ increasingly diverged from other central banks, especially the US Federal Reserve. The resulting widening in the yield gap between 10-year US and Japanese bonds favoured the US Dollar over the Japanese Yen. That gap is now narrowing following the BoJ’s 2024 decision to phase out its ultra-loose policy and interest-rate reductions by other major central banks.

Why does risk sentiment influence the Japanese Yen?

Investors often regard the Japanese Yen as a safe-haven asset. During periods of market stress, its perceived reliability and stability make them more inclined to move funds into the currency. As a result, turbulent conditions are likely to lift the Yen against currencies considered riskier investments.