GBP/JPY remains stable after a volatile session, trading near 194.20 during European hours on Monday. The Pound Sterling (GBP) finds support from market expectations that the Bank of England (BoE) may adopt a slower pace of policy easing. According to a Reuters report, traders anticipate the BoE will keep interest rates steady at 4.75% during its December meeting, with a projected 75 basis points (bps) cut to 4.00% by 2025. However, the British Pound faced headwinds on Friday following disappointing economic data. UK Retail Sales contracted more sharply than expected in October, while the flash S&P Global/CIPS Composite Purchasing Managers’ Index (PMI) for November dropped below the 50.0 threshold for the first time since October 2023, signaling a contraction in economic activity.The GBP/JPY cross could move upwards as the Japanese Yen (JPY) struggles due to uncertainty surrounding the Bank of Japan’s (BoJ) future rate hikes and a prevailing risk-on market environment. BoJ Governor Kazuo Ueda has hinted at the possibility of another interest rate hike as early as December. Meanwhile, Prime Minister Shigeru Ishiba’s administration is reportedly considering a $90 billion stimulus package aimed at mitigating the impact of rising prices on households.Japan’s Leading Economic Index was revised down to 109.1 in September, slightly below the anticipated 109.4. Despite this, the index marked an improvement from August’s final reading of 106.9, the lowest since October 2020. Market focus now shifts to Tokyo’s upcoming inflation and employment data, due later this week.More By This Author:Silver Price Forecast: XAG/USD Tests A Key Resistance Zone Above $31.00 GBP/JPY Price Forecast: Falls Toward 195.50 After Breaking Below Nine-Day EMAAustralian Dollar Holds Steady After The Release Of The RBA Meeting Minutes
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