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- GBP/JPY turns lower for the second straight day, though it lacks follow-through selling.
- Reduced bets for aggressive BoE rate cuts in 2025 underpin the GBP and lend support.
- Expectations that the BoJ will keep rates steady keep the JPY bulls on the defensive.
- The technical setup supports prospects for the emergence of dip-buying at lower levels.
The GBP/JPY cross attracts some intraday sellers following an Asian session uptick to the 195.50 region and turns lower for the second successive day on Wednesday. Spot prices, however, remain close to a nearly four-week high touched on Tuesday and currently trade just below the 195.00 psychological mark as traders now look to the UK Consumer Price Index (CP) report for a fresh impetus.
A stronger UK wage growth data released on Tuesday justified the need for the Bank of England (BoE) to keep rates on hold at its meeting on Thursday and forced investors to trim their bets for three 25 basis points rate reductions next year. This might continue to act as a tailwind for the British Pound (GBP). Furthermore, expectations that the Bank of Japan (BoJ) will not hike interest rates at the conclusion of the December policy meeting keep the Japanese Yen (JPY) bulls on the defensive and should act as a tailwind for the GBP/JPY cross.
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