GBP/JPY Rebounds as Japanese Yen Loses Momentum on Profit-Taking

The GBP/JPY cross saw a rebound on Tuesday as the Japanese Yen lost momentum following its sharp rise since the start of the month. The pair traded around 208.90 after briefly falling to 207.10, its lowest level since December 2025.

Profit-taking in the Yen combined with oversold Relative Strength Index (RSI) conditions in GBP/JPY helped buyers regain ground. Higher oil prices also added pressure on the Japanese currency as Japan relies heavily on imported energy from the Middle East.

The recent rally of the Yen was driven by expectations that the Bank of Japan would speed up its monetary policy tightening, prompting traders to unwind Yen-funded carry trades and bring capital back to Japan. Better-than-estimated Japanese Gross Domestic Product (GDP) data released earlier in the day reinforced these expectations but provided little support to the Yen.

The central bank is widely expected to raise interest rates at its September 17-18 meeting. Meanwhile, the Bank of England is expected to leave interest rates unchanged for a sixth consecutive meeting on September 17.