The GBP/JPY exchange rate has broken above the round level of 215.00 and is aiming for its 2008 high. Moreover, fundamentals support the likelihood of a continuation of the recent upward trend observed over the past two weeks.

Despite growing economic uncertainty caused by the conflict with Iran, traders still assess the probability of a Bank of Japan rate hike at the April monetary policy meeting as high. This, combined with expectations of possible intervention by Japanese authorities to prevent further weakening of the national currency, provides some support to the yen and adds pressure on the GBP/JPY pair. However, bullish sentiment toward the yen is being questioned amid economic risks related to potential external energy shocks caused by instability in the Strait of Hormuz.

Japan is heavily dependent on oil imports from the Middle East, and uncertainty surrounding this strategically important waterway continues to fuel concerns that the economy may face significant pressure in the future. This, in turn, weighs on the yen.

On the other side of the pair, the British pound is benefiting from the weakening US dollar and growing expectations of interest rate hikes by the Bank of England.

At present, traders are pricing in about 78 basis points of monetary tightening in 2026 starting from April, which supports bullish sentiment in GBP/JPY.

This, along with the recent rebound from the important technical 100-day simple moving average (SMA), creates a positive short-term outlook, suggesting that the path of least resistance for spot prices is upward. Therefore, any pullback may be viewed as a buying opportunity and is likely to remain limited. Oscillators are positive, indicating bullish dominance in the market, while the Relative Strength Index is close to overbought territory, signaling the possibility of a correction.