The GBP/JPY pair is holding steady near its two-week high, exceeding 203.00, as traders wait for UK employment data. The recent rise in the pair has slowed down because of concerns about the Bank of Japan’s potential rate hikes and issues regarding the UK’s finances. The upcoming UK job report may lead to a Bank of England (BoE) rate cut, with unemployment expected to rise to 4.9%, the highest since 2021. A weaker job market could lead to more BoE easing, reducing aggressive GBP bets and capping GBP/JPY gains. Meanwhile, the Japanese Yen continues to struggle due to uncertainty about the BoJ’s rate hikes.

Bank Of Japan Policy Considerations

BoJ policymakers are uncertain about how new policies will affect the economy and future interest rates. This cautious stance and general market optimism reduce the Yen’s appeal as a safe haven. While this slightly supports GBP/JPY, possible Japanese intervention could limit gains for the currency pair. The UK’s ILO Unemployment Rate is a key economic indicator that reveals the health of the job market and greatly influences GBP value. An increase in unemployment usually indicates economic weakness, which is bad for GBP, while a decrease is good. The next report, due on November 11, 2025, will provide more insights. Today, November 11, 2025, the UK jobs report reveals that unemployment has risen to 4.9%, the highest since 2021. This indicates a cooling labor market and strengthens the argument for a BoE rate cut next month. As a result, any potential strength in the British Pound may be limited. In the next few weeks, we should explore strategies to take advantage of potential GBP weakness against the Yen. Buying put options on GBP/JPY could be a smart move to prepare for a decline, as it offers a defined risk if the pair unexpectedly rises. Essentially, we are betting that the negative UK economic data will outweigh other influences.

Japanese Yen’s Persistent Weakness

It’s essential to note the ongoing weakness of the Japanese Yen. The BoJ is uncertain about its next rate hike due to concerns over the new prime minister’s policies and wage growth. This hesitation to tighten policy has historically weakened the Yen, providing some support for the GBP/JPY pair and preventing a drastic drop. The Yen’s decline has been a consistent issue since the global inflation surge in 2022-2023, as the BoJ took a different approach compared to other central banks. Although Japanese authorities may talk about intervention, their past actions have often provided only temporary relief. Therefore, any declines in GBP/JPY should be viewed as a struggle between two weakening currencies, not just a one-sided drop. A crucial factor to consider is that UK inflation is decreasing, with the latest October Consumer Price Index at 3.1%. This is a significant drop from the multi-decade highs seen in previous years. With inflation declining and unemployment rising, the BoE has a strong rationale to start easing monetary policy. This situation means the BoE is signaling potential rate cuts more clearly than the BoJ is indicating rate hikes. Therefore, we need to be cautious about holding long positions and should look for signs of increasing selling pressure on the Pound. The market will be very responsive to any further dovish comments from BoE officials. Create your live VT Markets account and start trading now.

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