GBP/JPY HOLDS GAINS ABOVE 194.00 AS TRADERS EXPECT BOE TO REDUCE RATES GRADUALLY
- GBP/JPY gains ground as the Bank of England may adopt a slower pace of policy easing.
- The Japanese Yen receives downward pressure from the uncertainty surrounding the BoJ rate hikes.
- Japan's Leading Economic Index was revised down to 109.1 in September, slightly below the anticipated 109.4.
GBP/JPY remains stable after a volatile session, trading near 194.20 during European hours on Monday. The Pound Sterling (GBP) finds support from market expectations that the Bank of England (BoE) may adopt a slower pace of policy easing. According to a Reuters report, traders anticipate the BoE will keep interest rates steady at 4.75% during its December meeting, with a projected 75 basis points (bps) cut to 4.00% by 2025.
However, the British Pound faced headwinds on Friday following disappointing economic data. UK Retail Sales contracted more sharply than expected in October, while the flash S&P Global/CIPS Composite Purchasing Managers' Index (PMI) for November dropped below the 50.0 threshold for the first time since October 2023, signaling a contraction in economic activity.
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