GBP/JPY Pulls Back Despite Japan’s Holiday
The GBP/JPY pair continues to decline, slipping near 184.00, despite limited trading activity due to Japan’s bank holiday. The Japanese Yen (JPY) gains traction amid hawkish sentiment surrounding the Bank of Japan (BoJ).
Bank of England Rate Decision Looms
Traders anticipate rate decisions from the Bank of Japan (BoJ) and the Bank of England (BoE). While the BoJ is likely to keep rates steady, speculation remains that a rate hike could occur as soon as October. Similarly, the BoE is expected to maintain its current rates in its upcoming meeting.
In the UK, the Pound Sterling (GBP) is expected to react to August’s upcoming Consumer Price Index (CPI) data. Headline inflation is projected to rise by 2.2% year-on-year, while Core inflation may increase to 3.5% from 3.3% in July.
According to Fitch Ratings, the BoJ may raise rates to 0.5% by the end of 2024, and further to 1.0% by 2026. BoJ’s Naoki Tamura also hinted at a potential rate increase to at least 1% as early as the second half of the next fiscal year, reinforcing a hawkish outlook.
