Is the GBPJPY Set For Gains?

Is the GBPJPY Set For Gains?
The United Kingdom is facing a number of headwinds at the moment: rising energy prices, a shortage of migrant workers, and general supply chain issues due to COVID. However, the Bank of England is on a steeper rate path than the Bank of Japan and this should keep the GBP supported medium term against the JPY. Furthermore, the Bank of England is facing increasing inflationary pressures from rising price pressures in the UK. This means that the Bank of England may increase interest rates more quickly than anticipated if inflationary pressures keep building. This could support the GBP against the JPY over this month.
Over the last 10 years, the GBPJPY has risen 09 times between Oct 07 and Dec 07. The average rise has been 4.69% and the largest gain was in 2016 with a 12.24% rise. The largest loss was in 2018 with a -3.19% loss.
Major Trade Risks: The main risk to this trade is if the Bank of England pause on hiking rates due to headwinds for the UK economy as Brexit issues once again return to hinder the UK’s economic growth.
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