Created on April 04, 2025

• The British pound has fallen rather significantly during the trading session on Thursday as we continue to see a lot of risk aversion, especially after the tariff announcement came out of the United States.
• Because of this, we’ve seen a lot of traders run toward the Japanese yen, long considered one of the premier safety currencies in the world.

What will be interesting to see is how the market behaves after we’ve had time to digest all of the news, which of course has been very rapidly released. The Americans have slept massive tariffs on most of the rest of the world, and how certain countries behave will have a major outsized influence on how the markets behave. For example, some of the bigger ones like China and the European Union obviously will be crucial, but there are other countries that will also be moving, both of these groups will more likely than not move this pair, if for no other reason than the fact that the GBP/JPY pair tends to move based on risk appetite more than anything else.

Friday Could Be Wild

During the trading session on Friday, we will get the employment numbers coming out of the United States, which almost always causes quite a bit of volatility as far as risk appetite is concerned. Because of this, it’s very likely that we will continue to see a lot of noisy behavior, and if it’s more of a “risk off day”, then the Japanese yen will continue to strengthen. The ¥190 level is an area that you need to be watching very closely, as it is a large, round, psychologically significant figure, and of course an area that traders will be paying close attention to for any signs of a bounce.

The ¥195 level above is going to be important as well, and if we can break above there then it would be a very bullish sign. That being said, we are nowhere near doing that, so I think more likely than not, we start bouncing around in a bit of a bounce.

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