From a technical perspective, on the weekly chart, GBP/JPY may have finished five waves up as the price is currently trading near the 100% Fibonacci Extension zone which is known to be a critical area according to Elliott Waves principles.
Not breaking above current levels will signal the start of a strong corrective cycle to the downside to retest previous lows such as the 38.2% Fibonacci Retracement level at around 162.91 and the previous wave (iv) in extension near 148.16.
The yen has been steadily weakening since the Bank of Japan adjusted its stance on its yield curve control policy in late July, sending 10-year Japanese government bonds
to its highest levels in nine years.
However, if the BOJ and the Japanese government do not intervene, short positions on the yen will likely be rebuilt further.
Thus, a possible intervention from the BOJ and the Japanese government may result in GBP/JPY beginning its corrective cycle caused by an upside move for the Japanese Yen.
Not breaking above current levels will signal the start of a strong corrective cycle to the downside to retest previous lows such as the 38.2% Fibonacci Retracement level at around 162.91 and the previous wave (iv) in extension near 148.16.
The yen has been steadily weakening since the Bank of Japan adjusted its stance on its yield curve control policy in late July, sending 10-year Japanese government bonds
to its highest levels in nine years.
However, if the BOJ and the Japanese government do not intervene, short positions on the yen will likely be rebuilt further.
Thus, a possible intervention from the BOJ and the Japanese government may result in GBP/JPY beginning its corrective cycle caused by an upside move for the Japanese Yen.