Bank of England Governor Andrew Bailey’s hawkish remarks on inflation and policy tightening lift the British Pound against the Yen.
The GBP/JPY pair recovered from an intraday low of 213.59 to trade near 214.15 after Bank of England Governor Andrew Bailey adopted a hawkish stance. Bailey indicated that tolerating temporarily above-target inflation was appropriate given economic softness and geopolitical uncertainty, while noting the central bank had already tightened policy significantly.
Earlier, the Japanese Yen strengthened on intervention fears after Finance Minister Satsuki Katayama warned of decisive action against volatility. Japan spent 11.7349 trillion Yen, or 73.6 billion USD, on currency interventions from late April to late May. Markets also monitored US-Iran peace talks, which could ease energy price pressures on Japan’s import-dependent economy.
Oil prices dipped on reports of a potential 60-day ceasefire extension and reopening of the Strait of Hormuz, further supporting the Yen’s recovery.