Can British Pound hold near two-month high around 212.00 vs Yen as bulls await Thursday’s BoE?

GBP/JPY maintains its upward bias on Tuesday, supported by bullish sentiment towards GBP.
Gains in the cross remain constrained as intervention concerns discourage JPY bears.
With Thursday's crucial BoE policy announcement approaching, traders also appear reluctant to commit.

Bullish sentiment keeps GBP/JPY close to a two-month high in Tuesday's early European trade. Before positioning for additional upside, buyers are looking for sustained strength and acceptance above 212.00.

Relative strength in the British Pound (GBP) persists as recent UK budget updates ease fiscal concerns. Support also comes from growing market conviction that the Bank of England (BoE) will raise interest rates on Thursday. By comparison, uncertainty about when the Bank of Japan (BoJ) might next increase rates continues to weigh on the Japanese Yen (JPY). The resulting wide UK-Japan interest rate differential provides a supportive backdrop for GBP/JPY.

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

Can the Pound Retain Support as the UK Autumn Budget Leaves BoE Expectations Unchanged?

DBS strategists point to the Pound's relative resilience, observing that the UK Autumn Budget on 28 October "did not unsettle the gilt market and market pricing for an interest rate hike at the November 5 Bank of England meeting." With this backdrop in place, DBS anticipates a more pronounced hawkish shift among policymakers. 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 pattern is viewed as strengthening GBP's attractiveness against the Euro.

Intervention speculation is nevertheless keeping traders alert, with Japanese authorities seen as potentially stepping in again to support their currency. On Monday, Japan's Finance Minister Satsuki Katayama said the joint FX statement with the US remains in place and that the government stands ready to counter excessive or disorderly JPY weakness. As attention stays firmly on Thursday's much-awaited BoE monetary policy decision, this could discourage aggressive positioning and restrict further advances in GBP/JPY.

Even so, the fundamental picture outlined above appears to favour buyers, implying that any corrective decline is more likely to attract buying interest and stay contained. Confirmation of the positive near-term outlook still requires strong follow-through buying, which would open the way for GBP/JPY to extend the advance recorded over the past month or so.

How Has the Pound Sterling Performed Over the Last 7 Days?

The British Pound recorded its strongest performance against the New Zealand Dollar over the last 7 days. The table below sets out the percentage changes in the British Pound (GBP) against the major currencies listed for that period.

	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 major currencies are displayed in the heat map. To read it, select the base currency in the left-hand column and the quote currency in the top row. Selecting the British Pound on the left and following its row across to the US Dollar, for instance, gives the percentage change for GBP (base)/USD (quote) in the corresponding cell.