Created on September 09, 2026

The GBP/JPY pair has dropped significantly, only to turn things around and show signs of life again.

GBP/JPY

The British pound initially fell against the Japanese yen as we continued to see a lot of carry trade unwind around the world, but it has turned back around later in the day. Perhaps the Japanese yen got a little bit ahead of itself.

So as we head toward a Bank of Japan interest rate decision late next week, we also have to keep in mind that the interest rate differential is going to continue to be a big driver over the longer term.

The question is whether or not we have seen the carry trade unwind finish, or whether the market still has further to go.

The hammer that we are forming for the session is a good look. So we’ll see. I’ll be watching the 210 yen level for a potential breakaway to the upside.

A breakdown below the bottom of the candlestick for the day would be very negative. It could open up the pound to drop down to the 205 yen level.

Overall, this is a market that is being heavily influenced by the Bank of Japan and its intervention. And the question now is whether or not that intervention continues.

This isn’t the primary pair. The primary pair is dollar-yen, but this still has that huge interest rate differential. And even if the Bank of Japan does raise rates, it only makes a slight difference.

It certainly is a market that has been manipulated. That’s nothing new via intervention. But from a longer-term standpoint, not much has changed.

Maybe the British pound softens a little bit, and maybe the next high isn’t at 220 yen like we had seen at one point.

But the interest rate differential continues to be supportive, although that has deteriorated over the last couple of weeks.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

The EURJPY pair attempted to form sideways trading yesterday, however its stability below 180.80 barrier pushed it to renew the bearish attempts, to settle near 178.40 level.

Providing negative momentum by the main indicators reinforces the chances of resuming the bearish trend, to expect surpassing 177.80 level to pave the way for reaching extra negative stations, which are located near 177.35 and 176.70.

The expected trading range for today is between 177.35 and 179.40

Trend forecast: Bearish

– Written by


James Fuller

STORY LINK Pound Sterling Forecast: Rising Gilt Yields Keep GBP/USD under Pressure

The Pound US Dollar (GBP/USD) exchange rate edged lower on Tuesday, with renewed concerns over global inflation weighing on market sentiment and encouraging demand for safer assets.

At the time of writing, GBP/USD was trading at around $1.3524, down slightly from the start of Tuesday’s session.

The US Dollar (USD) gained ground on Tuesday as a fresh jump in energy prices heightened fears that inflation could prove more persistent across the global economy.

Brent crude moved closer to the $100-per-barrel threshold during Tuesday morning trading after targeted strikes hit Saudi energy infrastructure.

Investors are concerned that another sharp increase in energy costs could feed into consumer and producer prices, potentially forcing central banks around the world to maintain or even tighten restrictive monetary policy for longer.

However, the ‘Greenback’s’ gains remained relatively contained as investors adopted a cautious stance ahead of this week’s US inflation figures.

The data could prove crucial in shaping expectations for whether the Federal Reserve will raise interest rates next week.

Sterling (GBP) also came under pressure on Tuesday, with the latest jump in crude prices contributing to another sell-off in UK government bonds.

Growing concerns over the inflationary impact of higher energy costs pushed borrowing costs higher, with the yield on the benchmark 10-year gilt climbing by around 0.3%.

This left yields just below the multi-year highs reached during last week’s bout of bond market turbulence.

The latest increase in borrowing costs presents another challenge for Chancellor John Healey, as higher debt-servicing expenses could put additional strain on government finances and further reduce the Treasury’s limited fiscal headroom ahead of October’s Budget.

Near-Term GBP/USD Forecast: Broader Market Trends to Drive Trading

With no major UK or US economic releases scheduled, the Pound to US Dollar (GBP/USD) exchange rate could take its cues from broader market developments through the middle of the week.

Should inflation fears continue to dominate sentiment, investors may become increasingly reluctant to take on risk, potentially strengthening demand for safe-haven currencies such as the US Dollar.

Conversely, any signs of de-escalation in the Middle East could see energy prices retreat from their recent highs.

This could take some pressure off the ‘Greenback’ while also supporting Sterling if falling oil prices help ease concerns over UK inflation and bring gilt yields lower.

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2026.09.08 2026.09.08
Japan Finally Gets Its Stronger Yen. Forecast as of 08.09.2026

Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/

Japan appears to have finally achieved its long-standing goal of strengthening the yen. Currency intervention, speculation about aggressive BoJ rate hikes, and renewed capital inflows have all helped drive the Japanese currency higher. Let’s examine the situation and develop a trading plan for the USD/JPY pair.

Major Takeaways

• US participation in currency interventions is a necessity.
• The Bank of Japan will take a more aggressive stance.
• Pension funds’ appetite for Japanese assets is growing.
• Long trades can be opened if the USD/JPY pair breaks through 154.4.

Weekly Fundamental Forecast for Yen

Perseverance pays off. Japan has finally achieved what the government had long dreamed of—strengthening the yen. The decline of USD/JPY to 7-month lows began with currency intervention and continued as fundamentals shifted and the pair broke below the 155 technical level, triggering massive liquidation of long trades and fueling the decline.

Scott Bessent has every reason to be proud of himself. According to the Treasury Secretary, US participation in the foreign exchange market intervention was necessary. Japan is the largest holder of US Treasuries, and its sale as part of currency interventions will lead to higher yields. At the same time, the yen’s weakness contributed to the devaluation of other Asian currencies, which undermined the competitiveness of US manufacturers.

Japan’s Foreign Securities Holdings

Source: Bloomberg.

Indeed, according to Japan’s Ministry of Finance, holdings of foreign securities fell by $87.8 billion at the end of the summer, roughly matching the scale of foreign exchange interventions at the turn of July and August.

However, previous interventions more often failed than succeeded in reversing the USDJPY pair. Tokyo needed to change the fundamentals. This was done effectively. First, Policy Board Member Hajime Takata hinted that the decision to raise rates by 25 basis points in September was not set in stone. The BoJ might act more aggressively. Then, Nomura Securities stated that the central bank would raise rates by a quarter of a point at each meeting—in September, October, and December.

The acceleration of the monetary tightening cycle is not the only driver behind the sharp decline in USD/JPY quotes. Rumors are circulating that the growing attractiveness of Japanese assets is prompting large institutional investors to buy them, which will contribute to capital inflows into Japan and a stronger yen.

Bond Yields in US and Japan

Source: Bloomberg.

The largest pension funds in Japan and Norway have signaled plans to increase their exposure to the world’s third-largest economy. In August, the GPIF held an unscheduled meeting for the first time in seven years, reportedly to discuss a potential reallocation of its assets. Norway’s GPFN, meanwhile, announced changes to its investment strategy. Previously, the fund allocated its portfolio based on each country’s share of the global economy; it will now allocate based on market capitalization. The shift could bring an additional $17 billion into Japanese securities, providing another potential source of support for the yen.

Weekly USDJPY Trading Plan

The issue of capital flows remains unresolved, while any meaningful shift in the fundamentals will ultimately depend on the Bank of Japan’s policy stance—which it has yet to clearly articulate. It is therefore quite possible that yen bulls are getting ahead of themselves. Against this backdrop, stronger-than-expected US inflation data could trigger a rebound in USD/JPY. If the price pierces the 154.4 resistance level, consider opening long positions.

This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.

Price chart of USDJPY in real time mode