The GBP/JPY currency pair is experiencing mixed signals, with potential for downward pressure due to expectations of a Bank of England (BoE) interest rate cut in February. Conversely, the Japanese Yen (JPY) is gaining strength on increasing likelihood of a Bank of Japan (BoJ) rate hike later this week, supported by wage growth momentum in Japan.
GBP/JPY could face challenges as the BoE is widely expected to lower its interest rate in February. The Japanese Yen could gain support due to the increased likelihood of the BoJ hiking interest rates later this week. Tomoko Yoshino, the head of Japan's largest trade union, Rengo, reaffirms the ongoing momentum for wage increases in Japan. GBP/JPY continues to remain in positive territory for the fourth successive day, trading around 192.00 during the European hours on Wednesday.
The BoJ has consistently emphasized that sustained, broad-based wage growth is a key prerequisite for raising short-term interest rates. Interest rates FAQs What are interest rates? Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy.
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