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 3.75%. Latest change was Dec 18, 2025 (-25bp)%.
On that side the Bank of Japan policy is Hawkish and (BOJ) has set its interest rate to 0.75% by latest change, Dec 19, 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 9. and Fundamental Score for JPY is 4. So, base on the Fundamental Score, we predict mid-term upside price movement.

Market Overview & Performance

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

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -10% decrease against us dollar.
Euro "EUR", performance has been -1% down so far
Pond "GBP", performance has been -0.91% down as of now
Australian dollar "AUD", has dropped by -1.19%
New Zealand dollar "NZD", has dropped by -0.93%
Japanese YEN "JPY", experienced -1.07% fall
Swiss franc "CHF", experienced -1.14% fall so far
Canadian dollar "CAD", has lost -0.94%
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 -16162 included 87786 long, 103948 short and 5818 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 5818 repositioning Indicates closed positions and short-term profit-taking.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is -33933 included 104460 long, 138393 short and 10896 position changed from last week.
So they mainly have a bearish view on this asset and sold JPY for lower prices in long-term.
Last week 10896 repositioning Indicates closed positions and short-term profit-taking.

Retail Traders:

Crowd traders or Retail traders are bullish on the GBPJPY with 64% 36% ratio. 0 long pos and 0 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability GBPJPY prices may decrease.

Technical Levels and Support/Resistance

The GBPJPY pair is approaching a critical technical support level near 209.383.
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 212.816. Technically, If the pair continues to the upside, this resistance level could become a significant area to watch for sell entery potential.