CFD Trading Rate Great Britain Pound vs Japanese Yen (GBPJPY)

• GBP/JPY attracts strong follow-through buying for the third successive day on Thursday.
• The lack of decisive action and the BoJ’s uncertain rate outlook weigh heavily on the JPY.
• A modest USD downtick benefits the GBP and also contributes to the positive momentum.

The GBP/JPY cross gains strong positive traction for the third straight day on Thursday and spikes to the 195.00 neighborhood, or its highest level since August 2015 during the first half of the European session. 

Despite the recent verbal warnings by Japanese authorities, the lack of any decisive action and the Bank of Japan's (BoJ) cautious approach towards further policy tightening continues to weigh heavily on the Japanese Yen (JPY). This, along with a goodish pickup in demand for the British Pound (GBP), bolstered by a modest US Dollar (USD) weakness, turn out to be key factors that provide a strong boost to the GBP/JPY cross. 

The upward trajectory could further be attributed to technical buying following the overnight breakout through the 192.80-192.85 supply zone and a subsequent strength beyond the previous YTD peak, around the 193.50-193.55 region. Hence, it remains to be seen if the bullish run is backed by genuine buying or turns out to be a stop run as the market focus now shifts to the crucial BoJ decision, scheduled to be announced on Friday.

In the meantime, a mildly softer tone around the equity markets could offer some support to the safe-haven JPY. Apart from this, bets that the Bank of England (BoE) could start cutting interest rates, as early as June, might act as a headwind for the GBP. Heading into the key central bank event risk, the fundamental backdrop warrants some caution before positioning for a further appreciating move for the GBP/JPY cross.

• The Guppy breaks into new chart territory above 193.60, a nine-year high.
• Deflating JPY is rapidly approaching standoff territory with nervous BoJ.
• Japanese inflation figures, BoJ rate call loom ahead on Friday.

The GBP/JPY broke into a fresh nine-year high above 193.60 on Wednesday as the Pound Sterling (GBP) sees recovery bidding and the Japanese Yen (JPY) continues to weaken despite increasingly interventionist rhetoric from the Bank of Japan (BoJ). 

According to reporting from Nikkei, the BoJ is set to discuss the “impact of accelerating Yen depreciation”, a clear warning shot that the Japanese central bank could be weighing market operations to bring current Yen moves under heel. The BoJ is slated to deliver its latest Monetary Policy Report and rate call early Friday.

The Pound Sterling is enjoying a reprieve from recent selling pressure after Tuesday’s UK Services Purchasing Managers Index (PMI) recovered significant ground, bounding to 54.9 from the previous 53.1 and vaulting over the forecast downtick to 53.0. The only thing left of note on the economic docket for the UK this week will be Thursday’s GfK Consumer Confidence for April, which is expected to improve, albeit slightly, to -20 from the current -21.

Early Friday will also see the latest print of Japan’s Tokyo Consumer Price Index (CPI) inflation. Tokyo CPI inflation is expected to hold steady at 2.6% for the year ended April, while Core-core Tokyo CPI (headline inflation less volatile food and energy prices) is expected to ease slightly to 2.7% from 2.9% YoY.

GBP/JPY technical outlook

The Guppy broke through a recent technical barrier to squeeze out a fresh nine-year high just above the 193.60 level as the pair continues to price in technical support from the 190.40 region. 

GBP/JPY has been trending firmly bullish as the Yen continues to soften. The pair is up around 8% after a bullish bounce from the 200-day Exponential Moving Average near 179.00 at the start of 2024. The 200-day EMA is now breaking through the 185.00 handle as the bullish Guppy runs deeper into bull country.

GBP/JPY hourly chart

GBP/JPY daily chart

• Pound Sterling sees broad-market recovery after Services PMI beat.
• Markets shrug off a decline in the UK Manufacturing PMI.
• Japan Tokyo CPI inflation, BoJ rate call due on Friday.

The GBP/JPY pair extended gains on Tuesday, climbing towards 192.80 after an upside beat to the UK Services Purchasing Managers Index (PMI) earlier in the session. The UK Services PMI hit an eleven-month high of 54.9 for April, reversing the forecast decline to 53.0 from the previous month’s 53.1. The Pound Sterling (GBP) is gaining ground across the board as investors shrug off a miss in the Manufacturing PMI, which declined to 48.7 versus the forecast steady print of 50.3. Services comprise over 80% of the UK domestic economy compared to manufacturing’s 9.3% total output contributions.

Focus will shift to early Friday’s Tokyo Consumer Price Index (CPI) inflation print, which is expected to hold steady at 2.6%. Japan’s Tokyo CPI inflation will be followed by the Bank of Japan’s (BoJ) latest Interest Rate Decision. The BoJ’s latest Outlook Report for the first quarter is also expected around 03:00 GMT Friday. Yen traders will be looking for BoJ Governor Kazuo Ueda’s Press Conference due sometime Friday morning.

GBP/JPY technical outlook

The GBP/JPY is approaching a familiar topside technical resistance zone between 193.00 and 192.80. The Guppy has been plagued by sideways churn in the near-term as the pair cycles familiar levels in a wide range just above the 190.00 major handle.

Daily candlesticks remain trapped in April’s range, and GBP/JPY is hobbled just below nine-year highs set in March near 194.00. Despite congestion patterns, the pair remains firmly bullish, trading well north of the 200-day Exponential Moving Average (EMA) at 184.90.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY gains some positive traction in reaction to the upbeat UK Services PMI.
• A positive risk tone undermines the safe-haven JPY and further lends support.
• Intervention fears might cap the upside for the cross ahead of the BoJ on Friday.

The GBP/JPY cross attracts some dip-buying near the 190.85-190.80 region on Tuesday and climbs to a fresh daily peak during the first half of the European session. Spot prices currently trade around the 191.60 area and look to build on the overnight bounce from a one-week low.

The British Pound (GBP) gets a goodish lift following the better-than-expected release of the flash UK Services PMI, which rose to 54.9 in April from the previous month's final reading of 53.1. Apart from this, a modest US Dollar (USD) downtick, to a larger extent, overshadows an unexpected contraction in the UK manufacturing sector and turns out to be a key factor acting as a tailwind for the GBP/JPY cross.

The Japanese Yen (JPY), on the other hand, continues with its relative underperformance in the wake of the Bank of Japan's (BoJ) cautious approach towards further policy tightening. Furthermore, hopes that the Iran-Israel conflict will not escalate further remain supportive of a generally positive risk tone, which further seems to undermine the safe-haven JPY and lends additional support to the GBP/JPY cross.

Traders, meanwhile, remain on alert in the wake of speculations that Japanese authorities will intervene to prop up the domestic currency. This is holding back the JPY bears from placing aggressive bets ahead of the crucial BoJ policy decision on Friday. In the meantime, speculations about more aggressive policy easing by the Bank of England (BoE) might further contribute to capping gains for the GBP/JPY cross.

• Guppy recovers near-term after drop into 190.40.
• Thin data leaves the Pound Sterling exposed to further downside.
• Coming up this week: UK PMIs, Japanese Tokyo CPI inflation.

The GBP/JPY pair backslid into familiar lows near 190.40 as Pound Sterling (GBP) traders continue to look out for multiple rate cuts from the Bank of England (BoE) in 2024. Interest rate futures are currently pricing in a first cut from the UK’s central bank in July of this year, with at least two follow-up rate trims expected before the end of the year. Rate futures markets previously anticipated two cuts total in 2024, with the first initially pegged for August.

The S&P Global Purchasing Managers Indexes for the UK in April are slated to print early in the Tuesday market session. Markets anticipate a steady hold at 50.3 in the Manufacturing component. The Services component is expected to ease, albeit slightly, to 53.0 from 53.1.

Japan’s Tokyo Consumer Price Index (CPI) will print early Friday, with investors expecting YoY Tokyo CPI inflation to hold steady at 2.6%. The Bank of Japan’s (BoJ) latest Monetary Policy Statement will also occur sometime early Friday, with the BoJ’s Outlook Report for the first quarter expected around 03:00 GMT.

GBP/JPY technical outlook

The Guppy’s chart churn continues, with notable GBP weakness poking through. A near-term floor has been priced in near 190.40, with a heavy congestion zone built into the charts between 192.80 and 192.00.

Longer-term, the GBP/JPY pair is resting on the high end of an extremely bullish run up the charts. The pair trades well above the 200-day Exponential Moving Average (EMA) at 184.82, and the Guppy is sticking close to nine-year highs set in March above 192.50.

GBP/JPY hourly chart

GBP/JPY daily chart

• GBP/JPY drops 0.56%, as rising Israel-Iran tensions drive safe-haven flows to the Yen.
• Though lower, the pair stays bullish above the Ichimoku Cloud, with recovery possible upon reclaiming 192.00.
• Watch key levels: Immediate support at the Kijun Sen at 191.06, with potential further drops towards 190.55.

After consolidating around 192.00 for the last three days, the GBP/JPY finally tumbled to the 191.00 handle. A flight to safe-haven assets spurred by an escalation of the Israel-Iran conflict boosted the Japanese Yen (JPY) to the detriment of the Pound Sterling. At the time of writing, the cross has lost 0.56% and trades at 191.19.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY remains above the Ichimoku Cloud (Kumo), suggesting the pair is bullish. Despite sliding below key support levels, like the Tenkan and Kijun Sen, the 50-day moving average (DMA), and hitting a daily low of  190.29,  the pair resumed its recovery to the current exchange rates.

For a bullish continuation, traders must reclaim 192.00 before breaking the next resistance area at 192.80. Once cleared that would expose the 193.00 psychological level, followed by the year-to-date (YTD) high at 193.54.

On the other hand, if the pair slips below the Kijun Sen level at 191.06, that would exacerbate a drop below the confluence of an upslope support trendline and the 50-day moving average (DMA) at 190.55.

GBP/JPY Price Action – Daily Chart

• GBP/JPY slightly rises, within a 191.90/192.80 trading range.
• Positioned above the Ichimoku Cloud, technical indicators favor a bullish outlook, though signs of consolidation are evident.
• A breakout above 192.80 could lead to testing resistance at 193.00 and potentially reaching the year-to-date high of 193.54.

The GBP/JPY is flatlined for the second consecutive day, hovering around 192.30, clocking minimal gains of 0.05%. The cross-pair remains unable to crack the 191.90/192.80 range for the third straight day amid fears of Japanese authorities' intervention.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY remains above the Ichimoku Cloud (Kumo), suggesting the pair is bullish. However, it is consolidating as the distance between the Senkou Span A and B shrank, the same case with the Tenkan and Kijun-Sen levels, standing beneath the price action, at 191.46 and 191.06, respectively.

If the pair slips below 192.00, the Tenkan and Kijun Sen levels will be exposed. Further losses are seen if the cross tumbles below the confluence of an upslope support trendline and the 50-day moving average (DMA) at 190.55.

On the flip side, a break above resistance, seen at 192.80, could signal a continuation of the uptrend. The first supply zone to challenge would be 193.00, followed by the year-to-date (YTD) high at 193.54.

GBP/JPY Price Action – Daily Chart

• GBP/JPY remains confined between 191.60 and 192.80, unable to break through key resistance at 193.00.
• Technical analysis highlights potential decline towards strong support at 190.00, with key indicators aligning.
• Immediate technical supports to watch include the Tenkan-Sen at 191.46 and the Kijun-Sen at 191.06.

The GBP/JPY consolidates at around current exchange rates, unable to break above/below the 191.60/192.80 range, following an inflation report in the UK that sparked a rally in the GBP/USD pair. Therefore, after finishing Wednesday's session around familiar levels, the cross-currency pair trades at 192.22, virtually unchanged.

GBP/JPY Price Analysis: Technical outlook

The daily chart shows the pair has peaked, as buyers remained unable to crack the 193.00 figure to challenge the year-to-date (YTD) high of 193.53. That opened the door for a dip toward the 190.00 mark, a strong support level, as key technical indicators converged around that area. The April 2 low of 190.03, the 50-day moving average (DMA), and the top of the Ichimoku Cloud (Kumo).

Since then, the GBP/JPY remains subdued. The first resistance would be 193.00, followed by the YTD high. On the flip side, the first support would be 190.00, followed by key support levels. Up next would be the Tenkan-Sen at 191.46, the Senkou Span A at 191.26, and the Kijun-Sen at 191.06.

GBP/JPY Price Action – Daily Chart

• GBP/JPY holds positive ground near 192.20 after the release of the UK inflation report. 
• UK CPI rose 3.2% YoY in March vs. 3.1% expected. 
• The BoJ’s cautious stance weighs on the Japanese Yen (JPY) against the GBP. 

The GBP/JPY pair snaps the two-day winning streak around 192.20 during the early European session on Wednesday. The Pound Sterling (GBP) edges higher to an intraday high of 192.40 and then retreats following the hotter-than-expected UK Inflation data. 

The headline annual UK Consumer Price Index rose 3.2% in March, softer than a 3.4% increase in February. This reading came in above the market consensus of 3.1%, but still higher than the BoE’s 2.0% target, according to the Office for National Statistics on Wednesday. Furthermore, the core CPI inflation dropped to 4.2% YoY in March from 4.5% in February. Meanwhile, the UK monthly CPI rose 0.6% in March, the same pace seen in February. The GBP gains traction as investors push back market expectations of a September BoE rate cut. 

On the Japanese Yen front, the Bank of Japan (BoJ) has been cautious in normalizing its policy. Japanese CPI inflation is expected to remain above 2% through fiscal year 2024 and decelerate in fiscal year 2025, according to the BoJ’s quarterly outlook report. This triggers the anticipation that interest rates will remain extremely low for some time, which weighs on the Japanese Yen (JPY). Investors will monitor the fresh quarterly growth and price projections due at its April 25–26 policy meeting for any hints about the path of interest rate. 

• GBP/JPY climbs 0.60%, nearing the 192.00 resistance as the Japanese Yen weakens.
• The pair has fluctuated between 190.00 and 193.00 for 17 days, with significant moves restricted by crucial technical points.
• Possible intervention from Japanese authorities may drive GBP/JPY down, aiming for initial support at the Ichimoku Cloud's top at 189.00.

The GBP/JPY edges higher during the North American session, up by 0.60%, as the Japanese Yen (JPY) remains the weakest currency on Monday. At the time of writing, the cross-pair exchanges hands at 191.92, shy of cracking 192.00.

GBP/JPY Price Analysis: Technical outlook

During the latest 17-day span, GBP/JPY price action has remained within the 190.00-193.00 boundaries, unable to break below/above the first key support and resistance levels, keeping the pair range bound.

In the event of Japanese authority's intervention, the GBP/JPY might drop below 190.00, sending the pair tumbling toward the top of the Ichimoku Cloud (Kumo) at 189.00, closely followed by the 100-day moving average (DMA) at 187.29.

On the other hand, buyers reclaiming 193.00 look for a challenge of the year-to-date (YTD) high at 193.54, ahead of 194.00.

GBP/JPY Price Action – Daily Chart

• 'Bearish engulfing' on GBP/JPY suggests growing bearish momentum.
• Break below Tenkan-Sen may lead to more declines, with key supports eyed.
• Resistance at 192.00, recent highs key for reversals; market sentiment watched.

The GBP/JPY retreats late on Wednesday during the North American session and is down 0.27% as the market sentiment shifts sour. Speculation that the Federal Reserve wouldn’t cut rates as expected spurred risk aversion, with traders seeking safety moving to the Japanese Yen, the Greenback, and the Swissie. The cross exchanges hands at 191.82.

GBP/JPY Price Analysis: Technical outlook

The picture shows the formation of a ‘bearish engulfing’ candle pattern, which suggests that bears are gathering momentum. However, to confirm that the GBP/JPY has peaked at around 192.94 as of today, sellers must push prices below the Tenkan-Sen level at 191.49. Once cleared, the next stop would be the Senkou Span A at 191.12, ahead of falling to the Kijun Sen at 190.74.

On the flip side, the GBP/JPY first resistance would be the 192.00 figure, followed by April’s 10 high at 192.95. The next resistance would be the current year-to-date (YTD) high at 193.53.

GBP/JPY Price Action – Daily Chart

• GBP/JPY climbs past 192.00, buoyed by light economic data and upbeat sentiment.
• Resistance at 192.24, 192.50, with eyes on 193.00+.
• Defined support levels mark potential reversal points if retreat occurs.

The GBP/JPY climbed 0.29% late in the North American session after bouncing off daily lows reached earlier at around 191.35. Risk appetite improvement amid a light economic docket sponsored a rally in the cross-pair, which trades at 192.10.

GBP/JPY Price Analysis: Technical outlook

The GBP/JPY daily chart suggests the air is neutral to slightly upwards after buyers reclaimed 192.00. If the pair surpasses the April 4 high of 192.24, look for a test of 192.50. A breach of the latter will open the door to challenging the 193.00 figure. Further upside is seen at 193.53.

 On the other hand, if the cross dives below 192.00, that would expose the Tenkan-Sen level at 191.14. Once surpassed, the next support would be the Senkou Span A at 190.94, ahead of the Kijun-Sen at 190.74. in further weakness, the next stop would be the April 2 low of 190.03.

GBP/JPY Price Action – Daily Chart

• GBP/JPY nears week's highs, showing cautious uptrend despite lower high.
• Support at 190.96, resistance at 192.00 mark pivot points.
• Market eyes technical indicators, global economy for future direction.

The GBP/JPY posted decent gains of 0.17% on Friday amid a risk-on impulse following the release of market-moving economic data from the United States. Nonfarm Payrolls for March exceeded estimates, though they barely benefitted the US Dollar as witnessed by the GBP/USD. At the time of writing, the pair exchanges hands at 191.60 after hitting a low of 190.67.

GBP/JPY Price Analysis: Technical outlook

The pair finished the session near the mid-highs of the week but below the 192.00 figure. With he GBP/JPY achieving a lower high and low, the pair is slightly tilted to the downside, despite standing above the Ichimoku Cloud (Kumo).

Hence, the GBP/JPY first support would be the Senkou Span A at 190.96. A breach of the latter will expose the Kijun-Sen at 190.74, followed b the April 2 low of 190.03. Further downside is seen at the Senkou Span B at 189.38.

On the other hand, the first resistance would be the 192.00 mark. A breach of the latter will expose the 193.00 figure, followed by the year-to-date (YTD) high at 193.54.

GBP/JPY Price Action – Daily Chart

• GBP/JPY fades as UK-Japan interest rates are expected to converge. 
• In the UK, falling inflation is expected to lead to lower interest rates. 
• In Japan rising inflation is increasingly expected to lead to higher interest rates.

GBP/JPY trades a tenth of a percent lower on Friday, at just above 191.000, as converging UK-Japan interest rate expectations reduce the advantage for investors of holding the Pound Sterling (GBP) over the Japanese Yen (JPY), weighing on the exchange rate. 

Easing inflation expectations in the UK have led investors to speculate that the Bank of England (BoE) will cut interest rates in June. This has weakened the Pound Sterling since lower interest rates tend to reduce foreign capital inflows. 

Conversely in Japan, the Bank of Japan increased interest rates from an extraordinarily low, negative 0.1% level, at the bank’s March meeting. The move had many investors speculating as to whether the increase was a one-off or the start of a cycle of rate hikes that could strengthen the Yen over the longer run. 

In a recent interview with the Asahi Shimbun, Bank of Japan (BoJ) Governor Ueda seemed to suggest more interest rate hikes could be down the road given accelerating inflation. 

Ueda said the positive results of the Shunto spring wage negotiations will be reflected in wages through the summer, and then reflected in higher consumer prices later in the year. 

"Given annual wage talks outcome so far, trend inflation is likely to gradually accelerate," said Ueda. 

Survey shows UK inflation cooling 

In the UK meanwhile, the latest Bank of England (BoE) Decision Maker Panel (DMP) survey for February showed that most firms see selling prices and wage inflation cooling over the next year. 

According to the DMP survey, selling price expectations decelerated to 4.1% from 4.3%, the lowest reading in over two years. Wage growth expectations softened to 4.9% on a three-month moving average basis from 5.2% in February. 

Bank of England Governor Andrew Bailey recently said that market expectations for two or three rate cuts this year are “reasonable”, further increasing speculation the BoE will pull the trigger and cut rates in June.

Soft Services PMI data for March, released on Thursday, impacted the economic outlook for the UK, adding to the reasons for the BoE to cut interest rates. 

The UK Services PMI fell to 53.1, missing expectations and the prior reading of 53.4. 

Nevertheless, not all UK data was negative. A recent report by the UK’s largest building society Nationwide showed the first rise in house prices since January 2023, according to the Guardian. 

This comes after BoE lending data showed a surprise rise in Mortgage Approvals rising to their highest level since September 2022 in February. 

• GBP/JPY falls to 191.65, cautious after missing week's high, affected by weak UK services data.
• Further decline risk, with support at Tenkan-Sen, Senkou Span A.
• Japanese intervention concerns limit movement, market awaits new direction signals.

The Pound Sterling lost some ground against the Japanese Yen late in the North American session on Thursday, amid a risk-off impulse, following softer-than-expected UK Services PMI figures. At the time of writing, the GBP/JPY trades at 191.65, losing 0.12%.

GBP/JPY Price Analysis: Technical outlook

After bouncing off two-week lows of 190.03, the GBP/JPY registered back-to-back bullish sessions but failed to extend beyond 192.24, the current week's high. If buyers had reclaimed 192.50, that would’ve sponsored a move to 193.00, but intervention threats by Japanese authorities keep traders cautious.

On the other hand, Thursday’s price action witnessed the pair dipping toward 191.59, which could open the door to extend its losses past the Tenkan-Sen at 191.14. Once surpassed, the GBP/JPY next stop would be the Senkou Span A at 190.94, followed by the Kijun-Sen at 190.74. Further weakness could drive price action to April’s low of 190.03.

GBP/JPY Price Action – Daily Chart

• The daily RSI on the GBP/JPY reveals a strong bullish posture, while the MACD shows a shift towards a more balanced market.
• The hourly chart discloses the RSI regularly exceeding overbought thresholds.

In Wednesday's session, the GBP/JPY is trading at the 191.65 level, showing a 0.57% uptick. The market sentiment for GBP/JPY is majorly bullish, but there is a high likelihood that investors may start taking profits as the cross reached overbought conditions on the hourly chart.

On the daily chart, the Relative Strength Index (RSI) pointing north above 50 indicates that buyers currently have a slight advantage in the market. While there are no extreme levels, suggesting overbought conditions, the RSI reveals a generally strong bullish posture. On the contrary, the Moving Average Convergence Divergence (MACD) is generating decreasing red bars, hinting at the presence of negative momentum and pointing toward more balanced market conditions.

GBP/JPY daily Chart

The hourly chart presents a contrasting perspective with the RSI logging higher values, lying deep in overbought terrain. This tends to predict a downward correction as the upward momentum may be overextended. In addition, the green rising bars of the MACD histogram also demonstrate positive momentum, reinforcing the strong presence of buyers in the market.

GBP/JPY hourly Chart

In terms of the overall trend, the GBP/JPY is positioned above its 20-day, 100-day, and 200-day SMAs. This pattern signals an enduring bullish trend in both short-term and long-term periods. In summary, while both the daily and hourly charts appear mostly bullish, the indicators reveal a stronger upward momentum in the hourly market with the possibility of a downward correction in the short term. However, as the pair holds above the main SMAs, the downward movements could be considered a mere correction.

• The Sterling has trimmed some losses amid Yen weakness and upbeat UK manufacturing data
• Failure to break above 190.75 would keep the bearish structure intact.
• An AB=CD correction might push the pair to 189.70. 

The Sterling is moderately higher on Tuesday, favored by a somewhat weaker Yen, which suffers when US Treasury yields rise and the upbeat UK manufacturing figures. Bulls, however, are likely to be challenged at the 190.75 area.

GBP/JPY Price Analysis: Technical Outlook

The pair has completed a bullish cycle at 193.55 and is going through a corrective reversal with scope for further decline. Bears have been contained so far at the 61.8% Fibonacci retracement of the March rally, but a failure to return above 190.75 would keep the negative structure intact.

An AB=CD correction would push the pair through the 190.11 support area toward the 189.60 level. On the contrary. a confirmation above 190.75 and 1.91.50 would negate this view.

GBP/JPY 4-hour chart

• GBP/JPY revives from 190.00 as UK Manufacturing PMI returns to expansion.
• UK’s soft shop price inflation boosts BoE rate cut expectations.
• The expectations for Japan’s intervention to support the Japanese Yen have deepened.

The GBP/JPY pair discovers buying interest near the crucial support of 190.00. The cross finds support as the S&P Global/CIPS has reported that the United Kingdom Manufacturing PMI has returned to expansion after contracting for more than a year.

The UK Manufacturing PMI landed above the 50.0 threshold, which separates the expansion from contraction, at 50.3. The factory data was higher than expectations and the prior reading of 49.9.

Rob Dobson, Director at S&P Global Market Intelligence, said: “The end of the first quarter saw UK manufacturing recover from its recent doldrums. Production and new orders returned to growth, albeit only hesitantly, following yearlong downturns, with the main thrust of the expansion coming from stronger domestic demand.

The robust recovery in the UK Manufacturing PMI indicates a revival in household spending, fueled by growing expectations that the Bank of England (BoE) will start reducing interest rates sooner due to easing inflation.

In Tuesday’s Asian session, the British Retail Consortium (BRC) showed that shop price inflation grew by 1.3% in March, at the slowest pace in more than two years, due to softening prices of food and non-food items. This has increased expectations for the BoE to unwind its historically tight interest rate stance.

On the Japanese Yen front, uncertainty over the Bank of Japan’s (BoJ) interest rate outlook could push the Japanese Yen on the back foot. The BoJ is expected to adopt a cautious approach to further policy tightening due to the absence of concrete evidence for the wage growth spiral.

Meanwhile, speculation about Japan’s stealth intervention in the FX domain keeps the downside in the Japanese Yen limited. Japan's Finance Minister Shunichi Suzuki reiterated his warning about the recent rapid JPY moves on Monday, saying he would respond appropriately and would not rule out options against excessive volatility.

• GBP/JPY trades with a mild negative bias around 190.30 on Tuesday. 
• The verbal intervention from the Japanese Finance Minister and rising Middle East geopolitical tensions lift the Japanese Yen (JPY).
• BoE’s Bailey signaled markets are right to expect more than one interest rate cut this year. 

The GBP/JPY cross trades in negative territory for the fifth straight day near 190.30 on Tuesday during the early European session. The verbal intervention from the Japanese authorities provides some support to the Japanese Yen (JPY) for the time being. 

Japanese Finance Minister Shunichi Suzuki said on Tuesday that he will not rule out any steps to respond to disorderly moves and that he will monitor foreign exchange (FX) moves with a high sense of urgency. The verbal intervention might lift the JPY in the near term and cap the upside for the GBP/JPY cross. 

Additionally, warplanes attacked a building inside Iran's consulate complex in Damascus, Syria, on Monday. Some of the most senior members of Iran's Revolutionary Guard were killed, marking an escalation in the confrontation that has lasted over half a year. The ongoing geopolitical tensions in the Middle East might further boost safe-haven assets like JPY.

On the other hand, the dovish stance of the Bank of England (BoE) weighs on the Pound Sterling (GBP). The BoE Governor Andrew Bailey signaled markets are right to expect more than one interest rate cut this year, saying he is increasingly confident inflation is heading towards the central bank’s target. Any further dovish comments from the BoE official are likely to exert selling pressure on the GBP and create a headwind for the GBP/JPY pair.