GBPJPY Analysis

Introduction

The GBP/JPY is known for its volatility, driven by both the UK and Japan’s economic data and central bank policies. It is influenced by global risk sentiment, as both the British Pound and the Japanese Yen are significantly affected by market confidence. The pair is particularly sensitive to geopolitical events in the UK (e.g., Brexit) and monetary policy decisions from the Bank of England and the Bank of Japan.

Fundamentals and Interest Rates

The Bank of England policy is Dovish with the (BOE) current Interest rate 4%. Latest change was Aug 07, 2025 (-25bp)%.
On that side the Bank of Japan policy is Hawkish and (BOJ) has set its interest rate to 0.5% by latest change, Jan 24, 2025 (25bp).
(BOE) Higher interest rates generally lead to higher returns on investments denominated in GBP. This tends to attract foreign capital into GBP assets.

Based on the economic and macro fundamental data, The Fundamental Bias of GBP is Weak Bullish and for the JPY is -- Neutral.
Ziwox considering Weak Bullish bias for this asset and we anticipate long-term price increases.
Our Ziwox A, mid-term Fundamental Score for GBP is -1. and Fundamental Score for JPY is 9. So, base on the Fundamental Score, we predict mid-term downside price movement.

Market Overview & Performance

In the current trading session, "Sydney & Tokyo", Market risk sentiment is Strong Risk-OFF. The United States Dollar and British pound recorded the strongest performance, while the Gold and Switzerland Frank are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -0.73% decrease against us dollar.
Euro "EUR", performance has been -0.3% down so far
Pond "GBP", performance has been -0.05% down as of now
Australian dollar "AUD", has dropped by -0.21%
New Zealand dollar "NZD", has dropped by -0.3%
Japanese YEN "JPY", experienced -0.06% fall
Swiss franc "CHF", experienced -0.36% fall so far
Canadian dollar "CAD", has lost -0.2%
Market risk sentiment is OFF, Investors seek safety, favoring safe-haven currencies and assets while selling off riskier investments.Due to the market risk sentiment, GBPJPY price reduction is likely. Becasue investors become risk-averse from GBP, seeking safety amid uncertainty or market turmoil, leading to a sell-off in riskier assets and a flight to safe havens like the USD, JPY, and gold. Currencies tied to riskier economies (e.g., AUD, NZD) tend to weaken.

Market Sentiment and Positioning

GBP COT (Commitments of Traders):

Institutions Net Position on >British Pound is -1964 included 84500 long, 86464 short and 4616 position changed from last week.
So they mainly have a bearish view on this asset and sold GBP for lower prices in long-term.
Last week 4616 repositioning Indicates closed positions and short-term profit-taking.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is 79500 included 176400 long, 96900 short and 18089 position changed from last week.
So they mainly have a bullish view on this asset and bought JPY for higher prices in long-term.
Last week 18089 repositioning Indicates that they are optimistic about higher prices in mid-term.

Retail Traders:

Crowd traders or Retail traders are bullish on the GBPJPY with 45% 55% ratio. 1432 long pos and 2947 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability GBPJPY prices may continue to rise.

Technical Levels and Support/Resistance

The GBPJPY pair is approaching a critical technical support level near 200.752.
Technical trend is Sell, So If the pair continues to weaken, this support could become a significant area to watch for potential reversal or consolidation.
On the upside, there is key resistance near 204.179. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.