The GBP/JPY pair continues its upward movement, trading just below the psychological level of 199.00. The pair is gaining strength due to a weakening Japanese yen, which is under pressure from ongoing political uncertainty in Japan.

However, concerns over the country's political situation—including potential major reshuffles or a resignation—have somewhat eased. Prime Minister Shigeru Ishiba is expected to remain in office, despite a projected loss of the Liberal Democratic Party (LDP) ruling coalition's majority in the upper house elections.

The yen is also being weighed down by continued uncertainty in U.S.-Japan trade relations. On Monday, Japan's chief tariff negotiator Ryosei Akazawa stated that the country is aiming to conclude a trade agreement with the United States by August 1. At the same time, Japan is facing a new 25% U.S. tariff on its goods set to take effect on August 1. This tariff is in addition to the existing 25% tariff on automobiles—Japan's largest export to the U.S.

The pair is also likely to be influenced by the upcoming release of the UK S&P Purchasing Managers' Index (PMI) data scheduled for Thursday. It is expected that manufacturing contraction over the past six months will be minimal, while the services sector may show its strongest growth in nearly a year.

The Bank of England may slow or pause its sales of long-term bonds due to weak demand from traditional buyers such as pension funds. Additionally, market participants have reduced expectations for further monetary policy easing by the Bank of England, although most still anticipate two rate cuts in 2025.

From a technical standpoint, the pair remains within an upward channel, with the 199.00 psychological level acting as resistance. If this level is broken, GBP/JPY could aim for the 200.00 level, with an intermediate barrier near 199.40. As long as oscillators on the daily chart remain in positive territory, the pair does not appear ready for a downward correction.