Anna 
The GBP/JPY pair is undergoing a decline, reaching approximately 188.40 during the European session on Thursday. This marks the third consecutive day of losses for the pair. The Japanese Yen (JPY) is gaining strength, driven by hawkish remarks from Bank of Japan (BoJ) officials.
BoJ Governor Kazuo Ueda stated that it is fully possible to consider an exit from stimulus measures while striving to achieve the 2% inflation target. He emphasized the importance of rolling back the massive stimulus program once a positive cycle of wages and inflation is confirmed. The extent of rate hikes would be determined based on the situation at the time if negative rates are lifted.
Policy board member Junko Nakagawa shared a similar sentiment, stating that the prospects of sustainably achieving the 2% inflation target in Japan are gradually increasing. Nakagawa highlighted the need to carefully analyze data in deciding a policy shift and clarified that there is no preset idea on whether to end Yield Curve Control (YCC) simultaneously with the exit from negative rates.
In contrast, the GBP/JPY pair may have experienced a slowdown in its losses due to positive sentiment surrounding the UK Spring Budget presented by Chancellor Jeremy Hunt. The Office for Budget Responsibility (OBR) projected stronger economic growth for the UK, with expectations of a 0.8% growth in 2024 and 1.9% in 2025, surpassing previous forecasts.
Hunt acknowledged the challenges facing the UK economy, such as the financial crisis, the pandemic, and the energy crisis resulting from the conflict in Europe. His reassurance of the central bank’s commitment to keeping interest rates high to address inflation concerns likely supported the British Pound (GBP), contributing to a potential slowdown in losses for the GBP/JPY pair. The pair’s movements will continue to be influenced by BoJ statements, economic data, and geopolitical developments.
