The GBP/JPY cross has plunged over 300 pips to trade at 210.92, dropping more than 1.40% following signs of potential intervention by Japanese authorities in foreign exchange markets. The sharp selloff was triggered after Tokyo conducted a rate check, sparking immediate speculation that officials may be preparing to act against yen weakness. The dramatic move exposes the key 210.00 psychological level, which now serves as critical support for the pair.
This development comes as Japanese policymakers have grown increasingly vocal about excessive currency volatility, particularly regarding the yen’s prolonged weakness against major currencies. Traders holding long GBP/JPY positions have been caught off guard by the sudden reversal, with the intervention fears creating significant downside pressure. Currency markets are now on high alert for further action from Tokyo, which could trigger additional volatility across yen pairs.
FXnCO Insight
Traders should tighten stops on all JPY crosses immediately as intervention risk remains elevated and further sharp moves lower are possible if Tokyo follows through with actual market action.
Source: FXStreet