British Pound remains under pressure against Japanese Yen amid risk aversion
- GBP/JPY trades lower as the AI-led equity rout drives demand for the Japanese Yen.
- Falling JGB yields widen Japan's yield disadvantage, keeping Yen gains in check.
- Both the BoE and BoJ maintain hawkish policy outlooks amid persistent inflation risks.
GBP/JPY trades with a mild bearish bias on Friday as investors favour the safe-haven Japanese Yen (JPY) over the British Pound (GBP) amid a deepening AI-led stock-market rout. However, the risk-off mood also boosts demand for Japanese government bonds, pushing yields lower and keeping the Yen’s gains in check.
At the time of writing, GBP/JPY trades around 212 after hitting an intraday low of 211.36.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.63% | 0.58% | 0.49% | 0.60% | 0.97% | 1.07% | 0.42% | |
| EUR | -0.63% | -0.05% | -0.14% | -0.03% | 0.34% | 0.44% | -0.22% | |
| GBP | -0.58% | 0.05% | -0.08% | 0.02% | 0.40% | 0.49% | -0.17% | |
| JPY | -0.49% | 0.14% | 0.08% | 0.14% | 0.51% | 0.61% | -0.05% | |
| CAD | -0.60% | 0.03% | -0.02% | -0.14% | 0.38% | 0.47% | -0.19% | |
| AUD | -0.97% | -0.34% | -0.40% | -0.51% | -0.38% | 0.09% | -0.57% | |
| NZD | -1.07% | -0.44% | -0.49% | -0.61% | -0.47% | -0.09% | -0.64% | |
| CHF | -0.42% | 0.22% | 0.17% | 0.05% | 0.19% | 0.57% | 0.64% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Japan’s benchmark 10-year government bond yield falls to a four-month low, trading around 2.63%, down 4.70% on the day. The Yen already faces a yield disadvantage due to Japan’s lower interest rates compared with major peers, and falling bond yields add to that pressure.
The Bank of Japan (BoJ) has been gradually raising interest rates, taking its policy rate to 1.25% with a 25-basis-point hike in September before pausing in October. Policymakers continue to signal further tightening, with minutes of the September meeting, released on Thursday, showing that members agreed to keep raising rates and gradually reduce monetary easing.
One member said the BoJ would need to speed up rate hikes if inflation showed signs of overshooting expectations. Many members also warned that rising crude Oil prices keep upside risks to inflation high.
On the UK side, the Bank of England (BoE) raised its benchmark interest rate by 25 basis points to 4.00% on Thursday in an 8–1 vote. External MPC member Catherine Mann favoured a larger 50-basis-point increase to 4.25%.
The move marks the BoE’s first rate hike since 2023, joining other major central banks in tightening policy to contain inflation fuelled by higher energy costs linked to the war in the Middle East.
Pound support underpinned as BoE hawkishness keeps UK yields elevated
Analysts at MUFG note that “UK yields have held up better than in other major economies” as investors respond to the “hawkish message from the BoE signalling that at least one more hike is likely in the current tightening cycle.” They highlight that Governor Bailey “stated clearly that there was a strong case for another rate hike if the US-Iran conflict is not resolved,” reinforcing expectations that policy tightening has further to run. MUFG concludes that “overall, today’s hawkish BoE policy update should reinforce the GBP’s bullish momentum heading into year-end.”