The British Pound (GBP) plunged against the Japanese Yen (JPY) on Monday, wiping out most of its daily gains after reaching a 34-year high of 200.60. The GBP/JPY pair plummeted nearly 700 pips before settling around 196.00, a 3.5% decline from its peak.
Possible Bank of Japan Intervention Blamed for JPY Rebound
Market speculation suggests the Bank of Japan (BoJ) intervened in the foreign exchange market to weaken the surging Yen. While official confirmation is pending, news reports cite anonymous sources claiming the BoJ entered the market during Japan’s Showa Day holiday.
Quiet Week for Data, BoE Meeting Eyed Next Week
Both the GBP and JPY lacked major economic data releases on Monday. UK data remains light throughout the week, while the BoJ’s Meeting Minutes scheduled for Thursday are the key event for the Yen. Several Japanese market holidays this week will further limit trading activity. GBP traders await next week’s Monetary Policy Report and rate decision from the Bank of England (BoE).
GBP/JPY Technical Outlook: Will the Bull Run End?
The GBP/JPY witnessed its largest single-day trading range on Monday, highlighting the volatility. Although settling near 196.00, traders are cautious about the long-standing bullish trend’s continuation.
Despite the pullback, the GBP/JPY remains on track for a monthly gain, having closed positively in 13 out of the last 16 months.
With limited technical resistance at these multi-decade highs, the most significant support level lies far below at the 200-day EMA currently positioned at 185.16.
