GBP/JPY trading

GBP/JPY is the symbol for the currency pair of the British pound and the Japanese yen. Both currencies are also part of the top eight traded currencies in the world, with defined spaces where the GBP takes 4th place and the JYP takes 3rd place. As the USD doesn’t form part of the pair, the pair is called cross pairs and also comes under minor pairs in the forex market. It is a highly volatile currency pair and hence has been adorned with many nicknames like, “The Beast”, ‘The Dragon’, ‘The Widow-Maker’, and ‘The Geppy’. In this currency, GBP is the base currency and JPY is the quoted currency. 

Reading the GBP/JPY Price

The GBP/JPY reading can be done based on the technical indicators, chart patterns, and historical price action. Reading these factors can help you make the right decision on whether to purchase or sell the currency pair.

Technical Indicators: These are mathematical calculations that can be plotted on a graph and can be used to understand the fluctuations in the currency pair. The most commonly used signal is a forecast signal to predict future price movements. 

Chart Patterns: This is a shape within the chart that is determined by prices and will aid in long-term forecasting. Basically, it helps in determining the exact trends and highlighting them. These predictions will help in threading through a volatile market.

History of the GBP/JPY

GBP/JPY are currencies that have a very rich history. The GBP was a de facto global currency before the advent of the US dollar. The reason for the collapse from being a global currency to being taken over by the USD was the non-working of the Bretton Woods System. And the move to separate from the European Union, which was called Brexit, caused the currency to fall in value.

The Japanese yen, on the other hand, is one of the oldest currencies in the world. The unique development that Japan showcases is in itself a major attribute that contributes to the value of the currency. The government in itself intervenes in the best possible way to help the currency get the best growth in the forex market. 

Major Bodies Influencing the GBP/JPY / PRICE DRIVERS

Japan Statistics Bureau: The yen is known to be a highly volatile currency, particularly in response to news. The Japan Statistics Bureau monitors this data and takes the necessary steps to sort it.

Japan Meteorological Agency: Because Japan is in a prime location to be affected by natural disasters, the meteorological department makes it a point to effectively communicate with the appropriate authorities. This is because the pressure of an impending disaster can put significant pressure on the yen.

Bank of Japan: One of the main market regulators in Japan is the Bank of Japan, which is very knowledgeable about how changes in the economy affect the market. Every month, the bank also makes announcements about interest rates, and it is crucial to monitor both those and the bond market. 

Bank of England: The Bank of England, also known as the BoE, issues statements once a month, similar to how the ECB does. The bank is very active and significantly affects its currency, the pound sterling.

UK Parliament: The way the parliament operates and reacts to national and international financial and non-financial events has a significant impact on how the GBP performs. 

UK Office of National Statistics (ONS): The ONS is in charge of producing and maintaining the data that serves as the basis for UK socioeconomic policy decisions. Following the ONC releases is crucial for EUR/GBP traders because they provide a clear indication of whether GBP is likely to rise or fall. 

GBP/JPY Correlations

The pair has a negative correlation with gold. The value of the currency pair will rise if the gold price falls, and vice versa. The Japanese yen is a safe haven currency.