Haven Flows to the Yen Send GBPJPY Lower

The yen is catching a haven bid as risk appetite drains out of markets, knocking GBP/JPY back from the top of its six-week range.

A sharp sell-off in Asian tech stocks, another jump in oil prices and attacks on Middle East energy infrastructure have pushed investors towards safety on Thursday. The pound had pushed up to just shy of 212.00 earlier this week, but that move is unwinding fast with the Bank of Japan's 29-30 October meeting now firmly in view.

Latest Market Moves

• GBP/JPY had been trading around 210.40 as of Thursday morning, down about 0.7% on the day after topping out just below 212.00.

• USD/JPY slipped to a two-week low of 157.55 in early Thursday trade, while AUD/JPY dropped as low as 110.46.

• Nikkei 225 fell around 2%, the Kospi slid more than 3% and the Hang Seng lost 2.7%, with chip names such as Tokyo Electron and SK Hynix among the hardest hit.

• Brent crude climbed 2% to above $111 a barrel after a drone attack on Saudi Aramco's Shaybah field and fresh attacks in the Strait of Hormuz.

Risk-Off Mood Lifts the Yen

Thursday's risk aversion has been concentrated in Asia, where doubts over the payoff from massive AI spending hit tech stocks hard.

SoftBank dropped 5.6% and Samsung lost over 4%, while energy worries added to the unease as Brent pushed further above $110. That contrasts with Wednesday's session in the US and Europe, where strong earnings lifted the S&P 500 0.6% and the DAX 1.3%.

The yen has often lagged the dollar and Swiss franc during recent bouts of risk aversion, but this time it is beating the dollar too. Lower US yields are helping, with the Dollar Index near a three-week low as Treasury yields retreat from multi-year highs.

BoJ Meeting Puts a Hike Back on the Table

The Bank of Japan meets on 29-30 October, and a back-to-back rate hike is a live possibility.

The BoJ lifted its policy rate by 25 basis points to 1.25% on 18 September, a 31-year high. Governor Kazuo Ueda said last week that "as underlying inflation is quite close to 2%, it is becoming more important than before to anchor inflation around our target."

Reports earlier this month suggested policymakers were leaning against moving again so soon, so a hike next week would catch part of the market off guard and could give the yen another leg higher. Even a hold paired with a clear nod towards December would keep pressure on yen crosses.

Hot UK Inflation Gives Sterling a Cushion

The pound has support of its own, which may limit how far GBP/JPY falls.

UK annual inflation rose to 3.5% in September, above the 3.4% forecast and the highest since October 2025, while core CPI rose to 2.8%. Unemployment unexpectedly fell to 4.7% in the latest labour market data, keeping the Bank of England's 5 November decision firmly in focus.

GBP/JPY Rejected at the Top of Its Range

GBP/JPY has been stuck in a range between roughly 207.00 and 212.00 on the 8-hour chart since early September, after a sharp drop from around 217.00.

This week's push into the 211.50-212.00 resistance zone stalled just below 212.00, and Thursday's selling has dragged the pair back to around 210.40. The RSI has dropped from near 70 to 49, showing the upside momentum has faded quickly.

A break back above 212.00 would open the way towards 215.00, the next level of note on the way back to the early-September highs. On the downside, the 207.00-207.50 support zone has held since early September and remains the floor of the range.

Source: SpreadEx | GBP/JPY, 8-Hour Chart