GBP/JPY Bounces Back from YTD Low as BoJ Rate Hike Bets Mount

The British Pound has recovered from its year-to-date low against the Japanese Yen, with spot prices holding above 208.00 in early European trading on Thursday.

UK Finance Minister John Healey's commitment to fiscal discipline and growth agenda has provided support for the pound.

However, the near-term bias remains tilted in favor of JPY bulls amid aggressive repricing for a more hawkish Bank of Japan (BoJ), prompting caution before positioning for any meaningful appreciating move.

Traders have largely priced in a 25-basis-point BoJ rate hike at its upcoming September 17-18 policy meeting and assign a high probability of a follow-up move in December, according to BoJ board member Kazuyuki Masu's hawkish comments.