GBP/JPY has reached an all-time high of 193.500, largely influenced by divergent monetary policies between the Bank of Japan (BOJ) and the Bank of England (BOE). The BOJ's delay in rate hikes until Q3, driven by rising inflation and continued unlimited bond buying, is keeping the yen weak. However, the increasing weakness of the yen could prompt BOJ intervention in the FX market to strengthen the currency. On the other hand, the BOE is closely monitoring a robust labor market and rising inflation in food and energy. Despite this, the BOE remains cautious, focusing on developments with the Fed. Anticipation is high for upcoming BOE data and the monetary policy meeting on Friday, which could provide further insight into potential rate cuts.If the upcoming BOJ meeting mirrors the previous one, GBP/JPY could potentially hit the key level of 195. However, any indication of rate cuts from the BOE could weigh on GBP/JPY, leading to a bearish outlook and a potential decline towards the key level of 190.
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