British Pound drifts lower vs JPY amid intervention fears, UK political turmoil

The GBP/JPY cross struggles to capitalize on the previous day's bounce from the 100-day Simple Moving Average (SMA) and attracts heavy intraday selling on Tuesday. Spot prices maintain an offered tone through the early part of the European session and currently trade around the 213.00 mark, down over 0.40% for the day.

The Japanese Yen (JPY) strengthens across the board after US Treasury Secretary Scott Bessent confirmed through a post on X that the US and Japan took some actions together against excessive volatility in currency markets. The comments fueled fresh speculations that authorities will step in again to stem further weakness in the JPY, which turns out to be a key factor exerting pressure on the GBP/JPY cross.

Meanwhile, the summary of Opinions from the Bank of Japan's (BoJ) April meeting left the door open for an imminent interest rate hike. This helps offset the disappointing release of Japan's Household Spending data for March and lends additional support to the JPY. Apart from this, persistent geopolitical uncertainties benefit the JPY's relative safe-haven status and contribute to the GBP/JPY pair's decline.

Meanwhile, more than 70 Labour MPs publicly called for Prime Minister Keir Starmer to step down following the party's heavy losses in English local elections and parliamentary votes in Scotland and Wales. This, along with a broadly firmer US Dollar (USD), turns out to be another factor weighing on the British Pound (GBP) and the GBP/JPY cross, backing the case for a further near-term depreciating move.