• GBP/JPY dives to a fresh multi-week low amid sustained buying surrounding the JPY.
• Hawkish BOJ expectations, along with a softer risk tone, underpin the safe-haven JPY.
• A decisive break below the 188.00 mark supports prospects for further depreciation.

The GBP/JPY cross attracts fresh sellers during the Asian session on Friday and slides further below the 188.00 mark, hitting a three-and-half-week low in the last hour. 

This marks the third day of a negative move in the previous four and is sponsored by some follow-through buying surrounding the Japanese Yen (JPY), which continues to be underpinned by hawkish Bank of Japan (BOJ) expectations. In fact, BOJ Governor Kazuo Ueda reiterated earlier this week that the central bank will continue to raise interest rates if the economy and prices perform as expected. 

Adding to this, BoJ Board Member Hajime Takata said on Thursday that we must adjust monetary conditions by another gear if we can confirm that firms will continue to increase capital expenditure, wages, and prices. Furthermore, data released on Thursday showed that real wages in Japan unexpectedly rose for the second straight month in July, keeping the BOJ on track for another potential rate hike in 2024.