Anna 
The GBP/JPY cross has turned positive for the second consecutive day, recovering from an early dip to the 188.40 region on Wednesday. Currently hovering around 189.00 during the early European session, spot prices show resilience despite UK macro data.
The Japanese Yen (JPY) faced renewed selling pressure after Bank of Japan (BoJ) Governor Kazuo Ueda emphasized that the central bank would only consider an exit from its easy policy when a 2% inflation target is on the horizon. This dashed hopes of an immediate policy shift, supporting the GBP/JPY cross by encouraging dip-buying.
Despite market expectations of a future pivot away from the BoJ’s ultra-dovish stance, positive news on wage hikes in Japan and geopolitical risks have curbed losses for the JPY, keeping the GBP/JPY gains in check.
On the British Pound (GBP) side, support comes from anticipated prolonged higher interest rates by the Bank of England (BoE). While the UK GDP data for January indicated a 0.2% expansion, weaker Industrial and Manufacturing Production figures offset the positive sentiment.
The current market dynamics suggest a favorable environment for bullish traders. However, caution is advised, with a prudent approach recommended, awaiting further buying confirmation before expecting a substantial upward move. Traders are particularly keen on next week’s key central bank event risk – the highly-anticipated BoJ monetary policy decision on Tuesday.
