Market Overview – British Pound vs. Japanese Yen
The GBP/JPY pair advanced to record levels in the first session of the European market on Friday, 20 December 2025, after a series of bullish developments in the Asian and European sessions. The currency pair closed at 208.24 on Thursday, 18 December, a slight rise from the 52‑week low of 184.42 reached on 8 April. By Friday morning, the exchange rate had climbed above 209.00, breaking the 52‑week high of 210.63 set earlier this year.
Key Drivers
| Event | Impact on GBP/JPY |
|---|---|
| Bank of England rate cut (25 bps) – 18 Dec | Strengthened GBP relative to JPY, contributing to the early rise in the pair. |
| Bank of Japan rate hike (25 bps) – 19 Dec | Failed to lift the yen significantly; GBP maintained momentum. |
| US CPI data (2.7 %) – 19 Dec | Supported the dollar; the GBP, being a dollar‑linked pair, gained as the dollar weakened. |
| US Dollar Index technical test – 19 Dec | The index’s movement reinforced the GBP’s relative strength as investors sought risk‑off assets. |
| Persistent US dollar strength – Mid‑year trend | Continues to weigh on the yen and benefits the pound. |
Technical Snapshot (as of 20 Dec)
- Current Level: 209.18 (record high)
- 14‑Day RSI: 66.90 – bullish but below over‑bought thresholds
- 9‑Day EMA: 208.10 – serves as key support
- Resistance: 210.63 (52‑week high)
The pair’s upward trajectory has been sustained by a combination of monetary policy divergence and a strengthening dollar relative to the yen. While the Bank of Japan’s hike was expected to lift the yen, the impact was muted, allowing the pound to continue its ascent.
Outlook
Short‑term traders may watch for any reversal signals near the 209.00 level, where the pair recently faced a pullback. Longer‑term movement will likely depend on further policy actions from the BoE and BoJ, as well as developments in US inflation data and the dollar index’s stability.