The Japanese Yen became the major currency outperformer for July this week but has been widely flagged as having the legs to rise further over the coming days and weeks in price action that would see GBP/JPY at risk of a setback as far as the 144.10 level.
The Pound-to-Yen exchange rate has recently tested a major 15-year resistance on the charts and may be steeling itself for a break toward six-year highs, according to technical analysts at Commerzbank, although softness in Sterling and a tentative stabilisation of the Yen are headwinds for GBP/JPY.
The Pound-to-Yen exchange rate edged higher on Tuesday making it one of only two pairs to remain in the black on what was a down day for Sterling, although the rally has been slowing for a while and could now be curbed further in the weeks ahead if a turn higher by the Renminbi leads the Japanese Yen to bottom out.
The Japanese Yen was a comparative outperformer on Friday and on course to end the week second placed among major currencies after having largely overlooked a storming rebound in Dollar exchange rates that came amid signs of divergence between the Federal Reserve (Fed) and Bank of Japan.
The Japanese Yen outperformed most major currencies on Tuesday following the April policy decision from the Bank of Japan (BoJ) and amid demand for safe-haven currencies, although it may have scope to rise further in the coming weeks according to a range of analysts.