BoJ Intervention Sparks Sharp Drop in GBP/JPY Rate
The Japanese Yen strengthened against the British Pound on Friday, pushing the GBP/JPY exchange rate down to near June lows. The move comes amid speculation of a large-scale intervention by the Bank of Japan (BoJ) in the foreign exchange market.
According to Reuters, citing a market source, the BoJ may have conducted a $58.97 billion US dollar-selling, Japanese Yen-buying intervention on Thursday. This would be one of the largest currency interventions in history, and it triggered a significant drop in the GBP/JPY rate.
The intervention was reportedly done to weaken the value of the British Pound, which has been gaining strength against the Yen due to the wide interest-rate differential between the two countries. The Bank of England (BoE) has kept its policy rate at 3.75%, while the BoJ has maintained its rate at 1.0%.
The technical analysis suggests that the GBP/JPY rate is likely to remain under pressure in the near term, with multiple moving averages pointing to a bearish shift.