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ForexMediumUpdated•Originally published 18 June 2026•Updated 18 June 2026•

1 min read

GBP/JPY Under Pressure After BoJ Rate Hike and BoE Hold

Balance scale with Yen and GBP coins, gold bars, and maps of Japan and the UK on an orange background.

Key Facts

1The Bank of Japan raised its policy rate to 1.0% at its meeting on June 16.

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In a move reflecting a significant shift in Japanese monetary policy, the GBP/JPY currency pair is facing downward pressure following divergent central bank decisions. The Bank of Japan (BoJ) raised its policy rate to 1.0% at its June 16 meeting, while the Bank of England (BoE) maintained its base rate at 3.75% following an 8–1 vote by the MPC. This divergence has narrowed the interest rate differential, bolstering the Japanese Yen against the British Pound.

This shift comes as UK economic data showed a slight cooling, with monthly GDP contracting by -0.1% in April according to market data released on June 12. Conversely, hawkish expectations in Tokyo have intensified after a prolonged era of near-zero rates, prompting traders to reassess "carry trade" positions that previously relied on a structurally weak Yen.

Investors should monitor current GBP/JPY support levels amid ongoing forex volatility. Looking at the economic calendar, there are no major UK or Japanese catalysts scheduled for the next seven days; however, markets will remain sensitive to central bank rhetoric following the BoJ's move to 1.0% (as of June 16, 2026 close) to gauge the next phase of policy normalization.