Market Analysis

The GBP/JPY pair continues its upward momentum, reaching near 193.10 in the early European session on Thursday. The Japanese Yen (JPY) remains under pressure as market expectations grow that the Bank of Japan (BoJ) may delay further interest rate hikes this year. Traders are now focused on Japan's Tokyo Consumer Price Index (CPI) for September, set to be released on Friday.

The JPY weakens after BoJ Governor Kazuo Ueda indicated that the central bank is in no hurry to raise interest rates. The minutes from the BoJ's latest meeting, published on Thursday, reveal that policymakers are divided on the pace of future rate hikes, with uncertainty surrounding the timing of the next increase. Some board members suggested it would be "appropriate" for the BoJ to begin "gradually adjusting the significantly low policy interest rate."

In contrast, rising speculation that the Bank of England (BoE) will take a more cautious approach to rate cuts has lent support to the British Pound (GBP). BoE Governor Andrew Bailey expressed optimism about the downward trend in inflation, anticipating a gradual reduction in interest rates. Meanwhile, BoE policymaker Megan Greene cautioned against a rapid pace of rate cuts, citing risks from strong wage growth and economic activity.

Paraphrasing text from "FX Street" all rights reserved by the original author.