The GBP/JPY currency pair hit a weekly high of 213.98, reflecting a strong performance by the British Pound. This increase of over 1.10% this week stems from mixed economic data from the UK, while concerns about Japan’s fiscal policies have put pressure on the Yen. The pair now trades at 213.85, showing a weekly gain of 0.58%. Technical analysis suggests a bullish trend for GBP/JPY. Resistance is expected at 214.29 and 215.00. If the price falls below support levels at 212.04 and 210.71, bearish signals may arise. A dip below the 20-day SMA at 212.04 could indicate possible weakness.

Influence Factors of Pound Sterling

The Pound Sterling is one of the most actively traded currencies globally, especially against GBP/USD, GBP/JPY, and EUR/GBP. Its value is shaped by the Bank of England’s monetary policy, especially concerning interest rates aimed at achieving a 2% inflation rate. The economic health of the UK, reflected in GDP, PMIs, and employment data, also plays a significant role. A positive trade balance boosts the Pound, while a negative one has the opposite effect. Economic releases shed light on these key factors, directly influencing the Pound’s value. With strong demand for GBP/JPY pushing it close to its yearly high, it may be wise to explore further upward movement in the coming weeks. Currently, the pair trades at 213.85, supported by mixed but encouraging UK economic data. Recently released UK CPI data, slightly above expectations at 2.8%, suggests that the Bank of England may keep rates steady for longer, which supports the Pound. Meanwhile, the Japanese Yen is under pressure due to concerns about fiscal policies. Prime Minister Takaichi’s proposed ¥20 trillion stimulus package raises fears of increased debt and currency devaluation. This difference in policy between a firm Bank of England and a loose fiscal approach in Japan provides strong support for the GBP/JPY pair.

Trading Strategies for GBP JPY

Traders looking to take advantage of this trend might consider call options with strike prices around the resistance levels of 214.50 and 215.00. However, it’s essential to watch the Relative Strength Index (RSI), as it approaches overbought levels, often signaling a potential short-term pullback. The buying momentum experienced in 2025, where dips were seen as opportunities, appears to be ongoing. For effective risk management, it’s crucial to monitor key support levels closely. A significant drop below the 20-day average at 212.04 would be an early warning that upward momentum is weakening. If the pair falls below the January 19 low of 210.71, this could indicate a more substantial bearish shift, making protective puts a sensible choice. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now