GBP/JPY Drops Near 195.00 Ahead of Bank of England Rate Decision

GBP/JPY Drops Near 195.00 Ahead of Bank of England Rate Decision

The GBP/JPY currency pair slipped to around 195.05 during Wednesday’s European session as the market adopts a risk-averse stance favoring the Japanese Yen, a traditional safe-haven asset. The anticipation of the Bank of England’s (BoE) interest rate announcement on Thursday is keeping investors cautious.

Geopolitical tensions between Israel and Iran have intensified after US President Donald Trump urged “everyone” to evacuate Tehran and demanded the “unconditional” surrender of Iran’s nuclear ambitions. This renewed uncertainty is driving safe-haven flows into the JPY, putting pressure on the Pound Sterling.

Meanwhile, UK inflation data showed a cooling trend, with the Consumer Price Index (CPI) easing to 3.4% year-on-year in May, down from 3.5% in April. Core CPI, excluding volatile food and energy prices, rose by 3.5%, slightly below the forecasted 3.6%, supporting expectations that the BoE may keep rates steady at 4.25%.

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