GBP/JPY Rises as Intervention Fades, Eyes on UK GDP Data

The British Pound (GBP) has been rising against the Japanese Yen (JPY) as the impact of recent intervention wanes. Despite Japan's efforts to stabilize its currency through multiple interventions, the structural headwinds facing the Yen continue to weigh on it. The current account unexpectedly slipped into deficit in June, marking the first shortfall in 17 months.

The Bank of Japan (BoJ) has shifted away from its decade-long ultra-loose policy and started raising interest rates, but at a slow pace. Japanese interest rates remain relatively low compared to other major economies, making Yen-funded carry trades attractive. The UK's second-quarter GDP data could provide the next catalyst for the cross.

The intervention by Japan and the US has not been enough to stem the decline of the Yen, which fell to a 40-year low against the US Dollar (USD) in May. The latest action came after the Yen fell to a 40-year low against the USD, while GBP/JPY climbed to levels last seen in 2008.