GBP/JPY holds gains near 192.00 as traders expect a cautious policy-easing approach by BoE

GBP/JPY may appreciate as the BoE leans toward a gradual approach to policy easing.

The Pound Sterling may gain ground as BoE officials support following a gradual policy-easing approach.

The likelihood of a BoJ’s 25 basis point hike in December rose to nearly 60%, against 50% a week ago.

The GBP/JPY pair snaps its five-day losing streak, trading near 191.90 during Asian trading hours on Thursday. Economic data releases remain sparse for the United Kingdom (UK), with a similarly light calendar expected in the coming week.

As a result, the Pound Sterling (GBP) is likely to be influenced by market expectations regarding the Bank of England's (BoE) December interest rate decision. The GBP/JPY cross could find support as BoE officials lean toward a gradual approach to policy easing.

On Monday, during a speech at King’s Business School, BoE Deputy Governor Clare Lombardelli stressed the need for clearer signs of easing inflationary pressures before considering further rate cuts.

Deputy Governor Lombardelli also warned of the risks associated with inflation staying above the BoE’s target. She highlighted concerns about wage growth stabilizing at 3.5%-4.0% and the Consumer Price Index (CPI) lingering around 3% instead of the 2% target, which could present significant policy challenges.