GBP/JPY Finds Support Near 190.40, BoE Policy and Inflation in Focus

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The GBP/JPY pair has found a temporary foothold near 190.40 on Wednesday as the Bank of England (BoE) signals a reluctance to immediately cut interest rates despite easing shop price inflation. BoE policymakers emphasize the need for clearer evidence of a sustained decline in inflation towards their 2% target before considering rate reductions.

BoE Deputy Governor Dave Ramsden, who previously voted to maintain rates at 5.25%, reiterated the need to assess the persistence of inflation before determining policy adjustments. While the British Retail Consortium (BRC) reported a slight easing in annual shop price inflation to 2.5% in February, offering some relief, strong wage growth and high service inflation continue to keep the overall inflation outlook uncertain.

This week’s light UK economic calendar means Pound Sterling will be primarily influenced by market expectations for BoE rate cuts. Meanwhile, the Japanese Yen finds support as Japan’s January inflation figures came in higher than expected. The annual National Consumer Price Index (CPI) rose by 2.0%, exceeding forecasts for 1.8% but showing a slight deceleration from December’s 2.3% reading.


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