The GBP/JPY pair has been unable to hold above the key psychological level of 201.00. Prices have retreated to 200.75 ahead of the Bank of England's monetary policy announcement. The overall trend of declining inflationary pressure, fiscal challenges, as well as slower wage growth and rising unemployment, provide the Bank of England with room for potential monetary policy easing. Moreover, investors are pricing in roughly a 33% probability of a 25-basis-point rate cut today, while the chances of a rate reduction by year-end are estimated at around 70%. The Bank of England's decision will play a crucial role in determining the pound's direction and could give momentum to the GBP/JPY pair rate.

The main risk factor linked to central banks — concerns about the UK's fiscal situation, especially in the context of the upcoming autumn budget to be presented by Chancellor Rachel Reeves on November 26 — continues to deter pound buyers from taking aggressive long positions. Meanwhile, yen strength limits the upward potential for GBP/JPY.

On Wednesday, the minutes of the Bank of Japan's September 18–19 meeting were released, confirming expectations of a possible near-term rate hike, which supported the Japanese currency.

Additionally, rumors of potential intervention by Japanese authorities to prevent further yen weakening have added pressure on the GBP/JPY pair. At the same time, the Bank of Japan remains committed to restraining rate increases and expects that new Prime Minister Sanae Takaichi will introduce significant fiscal spending to combat inflation and stimulate the economy. These factors could prevent substantial yen appreciation and help keep the GBP/JPY pair near its current levels.

From a technical standpoint, oscillators on the daily chart are mixed, indicating that the pair has yet to choose a clear direction. Support is now seen at 200.75, while the nearest resistance lies at 201.00. A firm move above this level would open the way toward 201.30–201.50, and potentially to the next round number 202.00. If the pair fails to hold support around 200.75, prices may accelerate their decline toward the psychological level of 200.00, and then toward the monthly low.