Since two weeks ago, the British pound (GBP) has been slowly rising against the Japanese yen (JPY). The graph below shows how hard the pound tries to reach its highest level.

On September 14, 2022, the consumer price index (CPI) will be given by National Statistics. Economists think the index will go up by 10.2% in November from 10.1% in October.

CPI compares the prices of a typical basket of goods and services bought at a store.

According to a poll of analysts by Reuters, the Bank of England (BOE) may choose to take an enormous step. It would worsen things for households already in debt and facing a cost of living crisis.
Next week, the BoE will decide whether to raise rates by 75 basis points to deal with inflation higher than its 2% goal.

A survey done in August predicted that this year’s highest Bank Rate would be 2.50 per cent. As this, the GBP/JPY pair is going up to 166.12. The pair may find support near where it is now.

It, along with different policies from the Federal Reserve and the Bank of Japan, works against the risk-on trend and doesn’t help the Japanese yen or stop the GBP/JPY pair from going up during the day.

It will be interesting to see if bulls can keep their lead despite rumours that the government will soon step in to stop the JPY from falling.

Trade Idea

At the current prices, buying the pair could pay off in short to medium term.