After the Gap Is Filled, It May Test New Highs Again

Summary:

Bank of Japan Meeting Minutes: Hawks urge gradual tightening of monetary policy, while others favor a wait-and-see approach.

BUY GBPJPY

Close Time

CLOSED

200.519

Entry Price

207.000

197.000

210.290 +0.512 +0.24%

204.3

Pips

Profit

197.000

202.562

Exit Price

200.519

Entry Price

207.000

Fundamentals

The latest quote for GBPJPY is around 200.00, with the pair recently fluctuating within the mid-range. Short-term technical indicators suggest weakening upward momentum, necessitating vigilance against the risk of another pullback.

Minutes from the Bank of Japan's September policy meeting revealed deep divisions within the board, with members engaging in intense debate over the pace and timing of future interest rate hikes. Nine board members voted to keep the policy rate unchanged at 0.5%, rejecting a proposal by two hawkish members to raise borrowing costs to 0.75%. The discussion centered on balancing downside risks to economic growth with persistent inflationary pressures, particularly those stemming from elevated food prices.

Some members advocated for swift action. A hawkish member called for “regular” rate hikes, noting that data including corporate earnings and the Tankan survey were improving—key indicators guiding interest rate normalization. Another member cautioned that while tightening policy could provide the Bank of Japan with clearer insights into the global economic outlook, particularly the U.S. economy, the cost of waiting too long to tighten was “gradually increasing.”

However, most participants agreed that it would be preferable to wait for “more conclusive data” before considering further action. They noted that while conditions for tightening monetary policy were gradually emerging, acting now could “catch markets off guard” and potentially undermine financial stability. Some participants emphasized that maintaining accommodative monetary policy remained appropriate for supporting Japan's economic recovery as long as inflation expectations remained unanchored.

Another member emphasized that uncertainty surrounding the U.S. economic slowdown was a key reason for maintaining caution, though he acknowledged that based solely on domestic fundamentals, Japan might soon meet the conditions for another rate hike.

After the Gap Is Filled, It May Test New Highs Again_1

Technical Analysis

The GBPJPY pair has resumed its downward trend today, continuing its decline since 205.30. Given the current trajectory, with the gap at the 199.00 level now filled, should the current downtrend halt here, bulls may attempt another upward push to test the 207.00 range as a symmetrical retracement target.

Trading Recommendations

Trading Direction: Buy

Entry Price: 199.60

Target Price: 207.00

Stop Loss: 197.00

Valid Until: November 20, 2025 23:55:00

Support: 198.60, 197.85, 197.47

Resistance: 201.28, 202.85, 204.23

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