GBP/JPY - GBPJPY is on the thin ice - 05/21/2024 (GMT)

GBPJPY displays signs of weakness after a strong rally. Technically, RSI flashes the divergence, but the possible weakness of GBPJPY is imposed by increasing yields of 10-year government bonds for Japan, whereas yields of 10-year British guilts are stagnating.

This situation makes carry trade operations less attractive and can lead to a strengthening Japanese Yen in the near future.

Let's also not forget about Bank of Japan, which had pulled 23 billion dollars in the latest intervention, and may continue buying back Yen to maintain price stability.