The British pound remained flat against the Japanese yen, with GBP/JPY struggling below 188.00 as traders held back ahead of Bank of England (BoE) Governor Andrew Bailey’s speech. The pair showed little momentum, reflecting broader market caution amid uncertainty over the BoE’s policy direction and the UK’s economic outlook.
The yen stayed firm despite a weaker risk appetite, benefiting from its safe-haven status. Investors remained wary of global economic risks, including renewed trade tensions and the Federal Reserve’s policy outlook, limiting GBP/JPY’s ability to gain traction. Meanwhile, Japan’s economic data has shown mixed signals, leaving the Bank of Japan (BoJ) with little room for immediate policy shifts.
On the UK side, traders are looking for clarity on the BoE’s stance after recent data pointed to cooling inflation and weaker consumer demand. If Bailey signals a dovish approach or hints at potential rate cuts, the pound could face further pressure. Conversely, any reaffirmation of a cautious policy stance may provide some support to sterling, though overall sentiment remains fragile.
The broader market sentiment also weighed on the pair, with risk-sensitive currencies facing headwinds as investors grew increasingly cautious about global growth prospects. Rising US Treasury yields have kept riskier assets under pressure, adding to GBP/JPY’s struggles to break above key resistance levels.
Looking ahead, Bailey’s speech could set the tone for the pound’s near-term direction. If his comments suggest the BoE is more inclined to ease policy, GBP/JPY may extend its losses below 188.00. Conversely, any hawkish undertones could help stabilize the pair, though broader risk sentiment will continue to play a key role.
For now, GBP/JPY remains vulnerable, with traders waiting for stronger catalysts to determine the next move. Unless market sentiment shifts decisively, the pair could continue to trade within a tight range, with downside risks prevailing.
