GBP Weakens Against JPY Amid Hawkish BoJ Prospects

The British Pound (GBP) is under pressure against the Japanese Yen (JPY), trading 0.22% lower at around 216.85 during the European session.

The cross weakens as the Japanese currency strengthens, with financial markets pricing in an interest rate hike by the Bank of Japan (BoJ) in its policy meeting next month.

Strategists at Scotiabank highlight that Japan’s July inflation figures maintained the recent upward trend, noting that 'Japan’s July CPI rose to 1.9% in the year, in line with expectations, extending the steady pick-up in prices seen since February.'

They add that the latest 'inflation data added marginally to conviction that the BoJ will tighten next month, with 20bps or hikes reflected in swaps.'