GBP/JPY Pauses at a Three-year High as Rally Loses Momentum
- The GBP/JPY rate remains near highs last seen in April 2018
- Buyers struggle to break over 152.80
The GBP/JPY pair has been trading strongly to the upside this year as market participants have favoured the UK currency over the Japanese yen. Generally considered as a safe haven, the yen was pushed aside by traders and investors as they were looking for riskier trades across the currency market.
The Sterling has been posting significant gains against the yen starting January as the pair is up over 9% in the quarter that ended yesterday. Stretched to a larger timeframe, the GBP/JPY is up as much as 15% over the past twelve months.
The pair pushed higher on Wednesday for a second straight day with renewed buying momentum as traders lifted the exchange rate to 152.79, marking a three-year high. The levels above 152.70 were last seen in April 2018. On Thursday, the market remains near yesterday’s high with a session peak at 152.80 and a current market price of 152.60.
The UK currency has been trading mixed and relatively sideways against peers during the first three months of the year. The GBP/USD is little changed for that period with a 1.00% increase, while the GBP/CAD is virtually unchanged with a 0.05% difference to the downside compared to the opening price on Jan 4. The GBP/CHF, however, is up 7.8%, mostly due to the depreciation of the Swiss franc across the board.
The Japanese yen has been losing ground against other competitors, too. The USD/JPY pair has increased by over 7.5% in the first quarter as broad US dollar strength narrated currency market developments. The dollar has appreciated on the back of substantial vaccine progress, anticipated reopening of the US economy and the hopes that a swift recovery is on the horizon. The EUR/JPY pair has been more modest in its swing to the upside and marks an increase of 2.8% in the first trimester of 2021.