GBP/JPY Holds Steady on Holiday‑Thin Japanese Market

The British Pound/Japanese Yen pair traded largely flat on Monday, 3 November 2025, as market participants awaited the Bank of England’s (BoE) interest‑rate decision on Thursday and assessed the lingering uncertainty surrounding the Bank of Japan’s (BoJ) policy stance. With the yen still sensitive to BoJ tightening prospects, the cross lingered near the 202‑level, a key psychological and technical support zone.

Technical Landscape

  • Price Action The pair closed around 202.41 JPY per GBP, a modest retreat from an intraday high of 202.79 JPY. During the Asian session, the cross attracted buyers near 202.30–202.25, but failed to break through to the 203‑area. The market remained confined within the broader Friday range, with no significant directional movement.

  • Support & Resistance The 200.00 JPY level remains a critical floor, aligning with the 50‑day Simple Moving Average (SMA) and a horizontal support that previously served as resistance. This confluence continues to act as a barrier to further upside. The 21‑day SMA sits at 202.81 JPY, providing immediate resistance to any intraday rally. The 203‑area is therefore a key ceiling for the pair today.

  • Momentum Indicators The cross’s momentum is stalling below 203, with the 21‑day SMA effectively limiting upward attempts. Technical analysis suggests a limited upside potential in the short term unless new catalysts emerge.

Fundamental Drivers

  • Bank of England Traders remain cautious ahead of the BoE’s policy meeting, where the central bank is expected to set the next interest‑rate level. The market’s thin liquidity—partly due to Japan observing a public holiday—has reinforced a wait‑and‑see stance, with investors avoiding large directional bets.

  • Bank of Japan Uncertainty over the BoJ’s future rate hikes continues to weigh on the yen. Speculation that Japan’s Prime Minister Sanae Takaichi may pursue aggressive fiscal spending could restrain further tightening, acting as a tailwind for the GBP/JPY cross. The yen’s vulnerability to BoJ policy remains a key factor supporting the pound in this cross.

  • Fiscal Concerns in the UK While the BoJ’s uncertainty underpins upside potential, UK fiscal concerns are tempering gains. Investors remain wary of any adverse developments in the United Kingdom’s fiscal outlook, which could cap the cross’s upward trajectory.

Market Outlook

The GBP/JPY pair is currently trading near a psychological 200‑level that has proved resilient. With the BoE decision looming and BoJ policy still uncertain, the market’s direction remains largely constrained. If the BoE maintains its stance and the BoJ refrains from additional tightening, the pair could inch higher toward the 203‑area. Conversely, any dovish signal from either central bank may reinforce the existing support at 200 and keep the cross in its present range.