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GBP/JPY remains stable amid shifting expectations of central bank monetary policy. Traders are recalibrating their views on the Bank of England's potential rate cuts and the Bank of Japan's delayed tightening, while rising oil prices due to US-Iran tensions amplify inflation risks. The cross is consolidating within its weekly range as markets await further clarity on policy divergences. This stability impacts forex traders by highlighting the interplay between central bank decisions and commodity-driven inflation. The BoE's potential easing and BoJ's cautious stance could widen GBP/JPY spreads, while oil price volatility adds a layer of uncertainty. Positioning in carry trades and hedging strategies may shift as policy outcomes crystallize. For investors, the key focus will be on upcoming BoE and BoJ policy statements, oil price trends, and inflation data. The cross's direction hinges on whether geopolitical risks escalate further or central banks signal policy normalization. Traders should monitor technical levels at 168.50 (resistance) and 165.00 (support) for potential breakouts.
