Yen Weakens on Soft CPI as GBP/JPY Breaks Out

The GBP/JPY  trades higher as Pound sterling hits multi year high.It hit an intraday low of 198.11 and is currently trading around 198.28.  Intraday trend is bullish as long as support 196.90  holds.  

Tokyo’s Consumer Price Index (CPI) for June 2025 revealed a milder inflation trajectory than anticipated. The headline CPI registered a 3.1% year-over-year increase—down from 3.4% in May and lower than the consensus forecast of 3.3%. Core measures, including those excluding fresh food and energy, also posted 3.1% gains, similarly undershooting expectations and previous readings. Although inflation remains above the Bank of Japan’s 2% target, this moderation in price pressures points to a possible softening of underlying inflationary momentum. Consequently, these developments could inform the BOJ’s near-term stance on interest rate adjustments, since Tokyo’s CPI is widely regarded as a leading indicator of nationwide inflation trends.

‘The GBP/JPY pair is trading above  34 and 55 and 200 EMA (Short-term) and 365 EMA (long-term) on the 4-hour chart, confirming a bullish trend.  Any violation below 197.75 indicates the intraday trend is weak. A dip to 196.70/196/195/194/193.70 is possible.  Immediate resistance is at 198.25 a breach above this level targets of 200/202.

Market Indicators (4- hour)

CCI (50)- Bullish

Directional movement index - Bullish

Trading Strategy:  buy on dips

 It Is good to buy on dips around 197.70 with SL around 196.75  for a TP of 200.