British Pound trades lower against Japanese Yen as BoJ hawkishness lifts the Yen

GBP/JPY trades on the back foot on Wednesday as the Japanese Yen (JPY) outperforms its major peers following hawkish signals from the Bank of Japan (BoJ). At the time of writing, the cross is trading around 212.90, down 0.20%.

BoJ Governor Kazuo Ueda reiterated the central bank's tightening bias in remarks delivered by Deputy Governor Ryozo Himino on Wednesday. "With underlying inflation moving towards 2% and financial conditions remaining accommodative, we expect to continue increasing the interest rate and adjusting the degree of monetary accommodation in response to economic activity, prices and financial conditions," Ueda said.

The BoJ's latest Summary of Opinions showed that a majority of policymakers remain inclined toward further rate hikes.

However, the BoJ's gradual pace of policy normalization and the still-wide interest-rate differential with other major economies continue to act as headwinds for the Yen, limiting deeper losses in Yen crosses.

Despite broad intraday strength, the Japanese Yen has struggled to gain traction against the US Dollar (USD), which has strengthened sharply on growing expectations that the Federal Reserve (Fed) could raise interest rates later this year. Traders remain wary of another intervention by Japanese authorities as USD/JPY continues to trade above the 160.00 mark.

Meanwhile, the British Pound (GBP) remains under modest pressure as traders reassess the Bank of England's (BoE) monetary policy outlook following less hawkish remarks from BoE policymaker Alan Taylor and weaker-than-expected flash PMI readings released on Tuesday.