The currency pair rebounds 100 pips from daily lows as geopolitical risks and domestic developments drive demand for GBP.
The GBP/JPY cross climbed to 213.70 during early European trading, recovering nearly 100 pips from its daily low. The rally erased a modest bearish gap formed at Monday’s open, reflecting renewed buying interest in the pound amid heightened geopolitical risks and shifting UK political sentiment.
Prior to the rebound, the pair had faced downward pressure, with traders monitoring developments in Iran and the Bank of Japan’s policy stance. The yen’s bearish tone persisted, while the pound found support from domestic factors, including expectations around fiscal policy and economic resilience.
Market participants are closely watching for further cues from UK economic data and global risk sentiment, which could influence the pair’s next moves.