GBP/JPY Breaks Above 215 as Yen Weakness Continues

The GBP/JPY pair has been trading above the 215.00 level after recovering from an early pullback, near a one-week high on Monday.

A wide interest rate gap between Japan and other major economies continues to weigh on the Japanese Yen (JPY), supporting carry trades and providing a tailwind for GBP/JPY.

The Bank of Japan's (BoJ) short-term policy rate stands at 1.00%, while the Bank of England's (BoE) base rate is at 3.75%, leaving an approximate spread of 275 basis points in favor of the Pound.

Investors remain cautious on fresh GBP upside ahead of Thursday's UK data releases, including the Q2 GDP report, which may cap additional short-term upside in GBP/JPY.