GBP/JPY depreciates to near 195.50 ahead of the BoE Monetary Policy Report Hearings

GBP/JPY loses ground as traders adopt caution ahead of BoE Monetary Policy Report Hearings on Tuesday.

The British Pound may depreciate as markets price in an 80% probability of another BoE rate cut in December.

The Japanese Yen receives downward pressure from uncertainty over the timing of the next BoJ’s rate hike.

The GBP/JPY cross retraces its recent gains, trading near 195.50 during European hours. Traders exercise caution ahead of the Bank of England’s (BoE) Monetary Policy Report Hearings on Tuesday. During these hearings, BoE officials, including Governor Andrew Bailey, will address questions from the Treasury Committee of the House of Commons regarding recent interest rate decisions.

The British Pound (GBP) may face headwinds, with markets pricing in an 80% probability of another BoE rate cut next month, potentially bringing rates to just above 4% by the end of 2025. Investors are also closely watching the UK’s October inflation data, forecasted at 2.2%.

The Japanese Yen (JPY) faces pressure amid uncertainty surrounding the timing of the next interest rate hike by the Bank of Japan (BoJ). On Monday, BoJ Governor Kazuo Ueda emphasized that rate hikes would proceed gradually, depending on economic performance, but refrained from providing a specific timeline for future adjustments.