GBP/JPY: British pound / Japanese yen

GBP/JPY is the price of one British pound in Japanese yen. If the pair is at 195.00, one pound costs 195 yen. Traders call it the Guppy, and it has a reputation as one of the most volatile of the liquid currency pairs: it combines a currency that is sensitive to UK politics and data with one that swings with global risk appetite. That makes it popular with active traders and unforgiving to anyone who sizes positions carelessly.

This profile covers who trades it, the central banks behind it, what moves it, how it behaves through the day, its costs, a pip value example, correlations, the episodes that shaped it and how a beginner should approach it.

What GBP/JPY is and who trades it

GBP/JPY is a cross: it does not include the US dollar. Sterling is the base currency and the yen the quote, so a rising GBP/JPY means the pound is strengthening against the yen. Our guide to currency pairs explains how crosses are built from dollar pairs; GBP/JPY is effectively GBP/USD multiplied by USD/JPY.

Participants include UK and Japanese companies and investors, banks, macro funds and a large population of short-term speculators drawn by the range. Japanese investors have historically been active buyers of higher-yielding foreign currencies, and the pound has at times been one of them.

Like other yen pairs, GBP/JPY is quoted to two decimal places, so a pip is 0.01. For ESMA's leverage rules it counts as a major, because both currencies are on the list of USD, EUR, JPY, GBP, CAD and CHF, so EU retail clients can use up to 30:1. That is a lot of leverage for a pair this lively, which is exactly why the risk section below matters.

The two economies and central banks behind it

The UK and the Bank of England

The Bank of England's Monetary Policy Committee makes eight scheduled decisions a year, announced at 12:00 UK time, and targets 2% CPI inflation. The UK is a services-heavy economy with a large financial sector and a persistent current account deficit, which means sterling relies on foreign capital inflows. That reliance is one reason the pound reacts strongly to political and fiscal shocks that might make investors less willing to hold UK assets.

Japan and the Bank of Japan

The Bank of Japan's Policy Board meets eight times a year, with decisions released during the Tokyo day (early morning UK time). Japan ran near-zero and then negative short-term rates for years, ending negative rates on 19 March 2024 and raising rates gradually since. Japan is one of the world's largest net creditor nations, which supports the yen's role as a currency that investors bring home in times of stress.

The usual result has been a large interest rate gap in sterling's favour. Our guide to central banks and interest rates explains why the expected path of that gap drives currencies.

What typically moves GBP/JPY

Rate differentials and carry

When UK rates are well above Japanese rates, holding pounds funded in yen earns the difference, a carry trade. That flow has tended to support GBP/JPY in calm periods. If the gap is expected to narrow, because the Bank of England is cutting or the Bank of Japan is raising, the support fades.

Risk sentiment

The yen has often strengthened in market stress, while sterling, as a currency of an economy dependent on capital inflows, has often weakened. On a risk-off day GBP/JPY can therefore be hit from both sides at once, which is a big part of why its falls can be so steep. In calm, risk-seeking markets the opposite has tended to apply. Again, these are tendencies, not rules.

UK news

UK inflation, labour market data, GDP and retail sales are released at 07:00 UK time. Bank of England decisions at 12:00 UK time, the minutes and speeches by MPC members, and UK fiscal events (budgets and spending statements) all matter. See how economic data moves forex.

Japanese news and intervention

Tokyo CPI, national CPI, wage negotiations (the spring "shunto") and BoJ decisions shift yen expectations. Japan's Ministry of Finance has at times instructed the Bank of Japan to buy yen when it weakened rapidly, in 2022 and 2024, and those interventions moved every yen pair.

Its character: liquidity, sessions and volatility

GBP/JPY is liquid, but noticeably less so than GBP/USD or USD/JPY, and much of its trading happens via those two pairs. Times below are UK time; the UK and US change their clocks on different dates and Japan does not change at all, so overlaps shift by an hour for parts of the year.

• Tokyo session (about 00:00 to 09:00 UK time in winter, 01:00 to 10:00 in UK summer time): the yen side is active, especially around Japanese data. Sterling liquidity is thinner, so spreads are often wider.
• London session (about 07:00 to 17:00 UK time): usually the busiest period. UK data lands at 07:00 and the opening hour often sees large moves.
• London and New York overlap (about 13:00 to 17:00 UK time): active, especially when US data or Wall Street moves risk appetite.
• Late New York and rollover (around 22:00 UK time): typically the quietest stretch, with wider spreads.

Our market hours tool shows these windows in your own time zone.

Volatility is the defining trait. GBP/JPY has generally had wider daily ranges than the dollar majors and than EUR/JPY, which is where its reputation among traders comes from. A stop that would be generous on EUR/USD can be inside the normal noise on GBP/JPY. That does not make the pair better or worse to trade, but it changes the arithmetic of where to put a stop-loss and how large a position you can hold.

Costs of trading GBP/JPY

Spreads are typically wider in pips than on EUR/USD, GBP/USD or USD/JPY, and widen further in the Asian session, around rollover and around UK or Japanese announcements. Because the pair's range is also wider, the spread can be a similar or smaller share of a typical move, so compare cost against the size of the moves you aim to capture. Our guides to spreads and commissions and how to compare trading costs explain the all-in approach.

Swaps can be meaningful. With UK rates usually well above Japanese rates, long GBP/JPY positions have typically been the side that earns (or pays less) overnight, and short positions the side that pays, after the broker's markup. That can change as policy moves, and swap-free accounts treat it differently; see swap and overnight financing.

Pip value: a worked example

A pip on GBP/JPY is 0.01, and profit and loss accrue in yen. These numbers are illustrative.

• One standard lot is 100,000 pounds. A pip is 100,000 times 0.01 = 1,000 JPY.
• A mini lot is 100 JPY per pip, a micro lot 10 JPY per pip.

On a pound account with GBP/JPY at 195.00, 1,000 yen is about 5.13 GBP. On a dollar account with USD/JPY at 150.00, it is about 6.67 USD. On a euro account with EUR/JPY at 160.00, about 6.25 EUR.

Now the part that matters. Say you want to risk 100 GBP on a trade, and the stop needs to be 120 pips away because the pair often moves that far in a day. With pips worth about 5.13 GBP per standard lot, 120 pips is about 615 GBP per lot. To keep the loss at 100 GBP, you can trade about 0.16 lots. A beginner who opens one lot "because the margin allows it" is risking six times as much. The position size calculator and pip value calculator do this sum for any account currency.

Margin at 30:1 on 0.16 lots (16,000 pounds) would be about 533 GBP. Margin is collateral, not a loss limit. See leverage and margin.

Correlations with other pairs

• GBP/USD and USD/JPY are its building blocks. When both rise together, GBP/JPY rises strongly; when they offset, it is quieter.
• EUR/JPY and AUD/JPY often move in the same direction, because the yen and risk sentiment are shared drivers.
• EUR/GBP often moves opposite when sterling is the driver.

Holding long GBP/JPY and long EUR/JPY at the same time is mostly one bet against the yen. Correlations change, so check them over a recent window; see currency correlation.

Notable history

The 2008 financial crisis

As carry trades unwound and the UK economy was hit hard by the banking crisis, GBP/JPY fell dramatically through the second half of 2008. It remains one of the steepest declines in a major cross and a standard example of a carry unwind.

The Brexit referendum (23 June 2016)

As results of the referendum on 23 June 2016 came in, sterling plunged and the yen rallied as a haven, so GBP/JPY fell especially hard overnight into 24 June. The pound reached its lowest level against the dollar since 1985 that night. Spreads widened enormously and stop orders were filled far from their levels, a lesson in gap risk.

The sterling flash crash (7 October 2016)

During thin Asian trading on 7 October 2016, sterling dropped sharply within minutes before recovering much of the move. GBP/JPY fell with it. The episode showed how the quiet hours for the pound are also the riskiest for stops.

The UK mini-budget (September 2022)

After the fiscal statement of 23 September 2022, gilts and sterling sold off and the pound hit a record low against the dollar on 26 September. In the same period Japan was intervening to support the yen, which added to the moves in yen crosses.

The August 2024 carry unwind

After the Bank of Japan raised rates on 31 July 2024 and a weak US jobs report on 2 August, yen-funded positions were closed rapidly. On 5 August 2024 the Nikkei 225 fell 12.4%, and yen crosses including GBP/JPY dropped sharply within days before partly recovering.

Trading GBP/JPY as a beginner

Honestly, GBP/JPY is not an ideal first pair. That does not mean you must avoid it, but if you do trade it, the rules are stricter.

• Size small. Its range means the same stop in pips is rarer, and the stop you need is wider. Work out the lot size from the money you are willing to lose; see position sizing.
• Avoid the obvious traps. Holding through a Bank of England decision, a UK budget or a BoJ meeting is a deliberate choice, not an accident. Check the economic calendar.
• Be wary of the Asian session. Sterling liquidity is thin then, and that is when flash crashes have happened.
• Do not trade it for the swap. A positive overnight credit is small next to a typical daily move against you.
• Keep the odds in view. Most retail CFD accounts lose money, and the bigger the moves, the faster leverage turns a mistake into a large loss. Practise on a demo first and keep a trading journal.

Frequently asked questions

Why is GBP/JPY called the Guppy?

The name appears to be a play on the pair's letters, GBP and JPY. Like most market nicknames it has no official origin, but it is widely used by traders and in market commentary.

Why is GBP/JPY so volatile?

It combines a pound that is sensitive to UK politics, data and capital flows with a yen that tends to strengthen in stress. On risk-off days both sides can push the pair the same way, which produces large moves.

How much is a pip worth on GBP/JPY?

On a standard lot of 100,000 pounds, a pip is 1,000 yen. Converted into pounds, dollars or euros it is usually somewhere around 5 to 7 units, depending on the exchange rate at the time.

What leverage can I use on GBP/JPY in the EU?

Retail clients of EU-regulated brokers can use up to 30:1, because both currencies are on ESMA's list of major currencies. Professional clients may be offered more, with fewer protections.

When is GBP/JPY most active?

Usually during the London session, roughly 07:00 to 17:00 UK time, with the first hour after UK data often the liveliest. The late New York session is typically the quietest.