GBP/JPY breaks through the 197.00 barrier for the first time since 2008 as the market forcefully challenges the Bank of Japan’s (BoJ) ultra-loose monetary policy. This historic surge is fueled by the BoJ’s decision to maintain its accommodative stance, prompting a widespread Yen selloff.
Key Factors:
- BoJ Disappointment: The lack of any substantive policy shift by the BoJ, despite rising inflation and pressure on the Yen, has significantly weakened the Japanese currency.
- UK Economic Calendar: A relatively subdued UK economic calendar next week keeps the focus on the Yen’s dynamics.
- Japanese Retail Sales: The upcoming release of Japan’s Retail Sales figures on Tuesday could add further volatility to the Yen, with expectations of a slowdown in growth.
Technical Outlook: Extreme Bullish Momentum
- Uncharted Territory: GBP/JPY ventures into multi-year highs, signaling a powerful breakout and bullish continuation.
- Strong Gains: The pair’s remarkable 10.2% surge from its 2024 low further reinforces the bullish narrative.
- Historical Perspective: The current price action echoes the 2020 recovery, where GBP/JPY gained over 50% from its lows.
Outlook:
GBP/JPY’s trajectory remains strongly bullish as the market continues to challenge the BoJ’s dovish policy. Traders should monitor upcoming Japanese economic data for potential catalysts affecting the Yen and GBP/JPY.
