GBP/JPY trades under pressure on Thursday as the Japanese Yen (JPY) strengthens across the board amid speculation that Japanese authorities may have intervened in the foreign exchange market after the Yen fell to a 40-year low against the US Dollar (USD) earlier this week.
At the time of writing, the cross is trading around 215, retreating from the two-month high of 216.08 touched during the Asian session
According to Reuters, it was not immediately clear what drove the Yen’s sharp rebound, and Japan’s Ministry of Finance declined to comment. Some traders and strategists speculated that authorities had conducted a rate check. Traders remain alert to the possibility of intervention by Japanese authorities.
However, the downside in GBP/JPY could remain limited as investors continue to take advantage of Japan’s relatively low interest rates compared with other major economies, supporting carry trades. From a technical perspective, the broader trend also remains tilted to the upside. Technical Analysis: In the 4-hour chart, GBP/JPY holds a mildly bullish bias as it stays above the 100-period simple moving average (SMA) at 214.25 and the 200-period SMA at 214.19.