The GBP/JPY currency pair reversed an intraday dip below 215.00 and climbed back toward its highest level since July 2008 during the early European session on Tuesday, signaling strong bullish momentum in the cross [1]. Despite rising economic uncertainties stemming from the Iran war and instability in the Strait of Hormuz, which have led to concerns about external energy shocks for Japan, traders continue to price in a greater chance of a Bank of Japan (BoJ) rate hike at the upcoming April policy meeting [1]. This expectation, along with speculation that Japanese authorities may intervene to prevent further yen weakness, has provided some support to the Japanese yen, though these factors have not been sufficient to reverse the overall bullish trend in GBP/JPY [1].
The Japanese yen was the strongest against the US dollar among major currencies today, with a 0.25% gain, but it remained weaker against the British pound, which benefited from a softer US dollar and rising bets on Bank of England (BoE) rate hikes [1]. Specifically, traders are pricing in approximately 78 basis points of BoE tightening in 2026, starting in April, which has further supported GBP/JPY bulls [1]. The recent rebound from the technically significant 100-day Simple Moving Average (SMA) also validates the near-term positive outlook for the pair, suggesting that any corrective pullback is likely to be viewed as a buying opportunity and remain limited [1].
Market participants remain cautious due to Japan's reliance on Middle Eastern oil imports and the ongoing uncertainty in the strategic Strait of Hormuz, which could place substantial strain on the Japanese economy in the foreseeable future [1]. Nevertheless, the prevailing sentiment favors further upside for GBP/JPY, with the path of least resistance remaining to the upside according to technical and fundamental factors cited in the article [1].
CONCLUSION
GBP/JPY continues to trade near its highest level since July 2008, supported by expectations of BoE rate hikes and a softer US dollar, despite geopolitical uncertainties and potential BoJ intervention. While the Japanese yen has shown some strength against the US dollar, the overall outlook for GBP/JPY remains positive, with any pullbacks likely to be limited.