GBP/JPY Edges Lower To Near 184.00 Due To Hawkish Sentiment Surrounding The BoJ

GBP/JPY extends its decline for the second successive day, trading around 184.20 during Monday’s European hours. The Japanese Yen (JPY) finds support despite low trading volumes due to Japan’s Respect-for-the-Aged Day Bank Holiday. This downside pressure on GBP/JPY cross is likely driven by the hawkish sentiment surrounding the BoJ.Traders await interest rate decisions from the Bank of England (BoE) and the Bank of Japan (BoJ) later this week. The BoJ is widely expected to keep rates unchanged while leaving the possibility open for a rate hike as early as October. Similarly, the BoE is also expected to hold rates steady in its upcoming decision.On Friday, Fitch Ratings’ latest report on the Bank of Japan’s policy outlook suggests that the BoJ might raise rates to 0.5% by the end of 2024, 0.75% in 2025, and 1.0% by the end of 2026. Additionally, the hawkish BoJ policymaker Naoki Tamura stated on Thursday that the central bank should raise interest rates to at least 1% as early as the second half of the next fiscal year. This comment reinforces the BoJ’s commitment to ongoing monetary tightening.On the United Kingdom (UK) front, the Pound Sterling (GBP) will be guided by the Consumer Price Index (CPI) data for August scheduled for Wednesday. The headline inflation is expected to rise steadily by 2.2% year-on-year in August. Meanwhile, annual Core inflation may grow at a faster pace of 3.5% from 3.3% in July.More By This Author:USD/CHF Falls To Near 0.8500 As Recent Data Increase Odds Of A Bumper Fed Rate Cut GBP/JPY Falls To Near 185.00 Following The Remarks From BoJ’s Nagakawa, UK Economic Data Australian Dollar Continues To Lose Ground After Westpac Consumer Confidence