GBP/JPY slipped toward the 200.00 level in late Asian trade on Thursday, as the Japanese Yen (JPY) gained ground following the release of the Bank of Japan’s (BoJ) July policy meeting minutes.
BoJ policy outlook under scrutiny
The minutes highlighted the central bank’s cautious approach after it held rates steady at 0.5% last week, while leaving the door open for further policy tightening. Investors are now shifting focus to Friday’s Tokyo Consumer Price Index (CPI) data for September. Core CPI excluding fresh food is expected to accelerate to 2.8% year-on-year, up from 2.5% in August.
A stronger reading would likely fuel market speculation that the BoJ may move toward additional rate hikes in the near term, supporting demand for the yen.
Sterling steady as BoE weighs next steps
The British Pound (GBP) traded broadly steady, with investors awaiting clearer signals on the Bank of England’s (BoE) policy path. Markets currently expect the BoE to keep borrowing costs unchanged for the rest of 2025, according to Reuters.
On Wednesday, BoE Monetary Policy Committee (MPC) member Megan Greene cautioned against rushing into rate cuts, noting that risks to the inflation outlook have shifted to the upside. Her remarks reinforced expectations that the central bank will remain cautious despite mounting pressure to ease policy.
