Anna 
GBP/JPY faced selling pressure on Wednesday, with some of the strong gains from the previous day being partially eroded. The pair fell to the 184.30 area, marking its highest level since September 13. However, GBP/JPY managed to recover slightly from its daily lows and is presently trading around 183.80, representing a decline of less than 0.30% for the day.
A significant factor contributing to the decline in GBP/JPY was traders choosing to reduce their bearish positions on the Japanese yen (JPY) following verbal intervention from Japanese authorities. Japan’s top currency diplomat, Masato Kanda, emphasized that the government was ready to address “one-sided, sharp” currency market fluctuations. Additionally, Japan’s Chief Cabinet Secretary Hirokazu Matsuno noted that they were not ruling out any measures to address abrupt, chaotic, and unfavorable foreign exchange movements.
Nevertheless, the Bank of Japan’s (BoJ) commitment to maintaining an ultra-accommodative monetary policy to support the domestic economy restricted the yen’s gains and limited the downside for GBP/JPY. On Tuesday, the BoJ made minor adjustments to its yield curve control (YCC) policy, disappointing investors who had hoped for a more aggressive move to end years of monetary stimulus. The central bank also stated that moving away from its extremely dovish stance would take longer than initially anticipated.
Conversely, the pound sterling was weighed down by a modest strengthening in the US dollar and speculation that the Bank of England (BOE) would keep its benchmark interest rate unchanged for the second consecutive time to support the weakening economy. These factors prevented GBP/JPY from capitalizing on a modest intraday rebound from around 183.00. Traders seemed cautious about making aggressive bets, preferring to stay on the sidelines ahead of the Bank of England’s upcoming monetary policy decision, scheduled for Thursday.
