GBP/JPY is currently moving sideways, trading between 210.00 and 211.50. Strong statements from the Bank of Japan (BoJ) and rising caution in the market are giving support to the Yen. The British Pound has stalled below 211.50, as it looks for direction with support remaining above 210.00. BoJ meeting minutes suggest more tightening of monetary policy, while rising tensions in the East China Sea are making traders more cautious, which in turn supports the Yen. Recent military drills by China, including missile exercises and blockades near Taiwan, have raised tensions and affected markets in Asia. The Yen is gaining as a safe haven during this unrest. Technical analysis indicates a drop in the bullish momentum for GBP/JPY, which is currently trading at 210.76, showing slight losses for the day.

Support and Resistance Levels

Key support levels are at 210.05 and 209.35; if these levels are broken, we could see a target of 208.90. For buyers, the high of 211.53 serves as a key resistance point, while targets of 212.75 and 214.38 are set based on Fibonacci extensions. The Yen is strong, especially against the Swiss Franc, as shown in a currency heat map. As GBP/JPY struggles to break above 211.50, the upward momentum appears to be fading as we near the end of 2025. The current range between 210.00 and 211.50 indicates uncertainty in the market. Traders should tread carefully with any further gains for the Pound, as support for the Yen is on the rise. The Yen’s strength is supported by solid economic data. Japan’s core CPI for November 2025 is reported at 2.8%, remaining above the BoJ’s 2% target for 20 straight months. This ongoing inflation boosts expectations that the BoJ will continue to tighten monetary policy into 2026, further supporting the Yen. Meanwhile, the Pound faces challenges from a struggling domestic economy. Recent data from the Office for National Statistics revealed that the UK economy grew only 0.1% in the third quarter of 2025, raising concerns about its future. This economic slowdown is making it hard for Sterling to maintain its gains against a strengthening Yen.

Geopolitical and Economic Factors

Geopolitical issues in the East China Sea are also increasing demand for the Yen as a safe haven. We recall the volatile market movements of 2022-2024 when central bank policies diverged greatly; any escalation could lead to similar volatility. This cautious atmosphere makes holding long GBP/JPY positions riskier. In light of this situation, derivative traders might consider purchasing put options with a strike price below the 210.00 support level. This could yield profits if the price falls toward the support trendline at 209.35. For a more controlled approach, a bear put spread could be utilized to limit both potential profit and loss while capitalizing on a predicted moderate decline in the upcoming weeks. Create your live VT Markets account and start trading now.

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