Today, Tuesday, the GBP/JPY pair is struggling to sustain the rebound that started near 199.00, which marks almost a two-week low, and remains confined to a narrow range. At the moment, prices are trading below 199.70, failing to surpass yesterday's high as market participants eagerly await the UK PMI release, expected to provide fresh momentum to the pair.

Meanwhile, ongoing uncertainty over the timing and pace of Bank of Japan rate hikes is weighing on the yen, which in turn supports GBP/JPY. Investors are concerned that domestic political instability and economic challenges linked to US tariffs may push the BoJ to further delay rate increases. In addition, overall market optimism and higher risk appetite are reducing the appeal of the yen as a safe-haven currency. At the same time, the "hawkish" minority dissenting from last week's BoJ decision to hold rates steady is seen as a potential signal of future tightening.

The market is also pricing in a possible 25-basis-point BoJ hike in October. This stands in sharp contrast to the Bank of England's dovish stance, as it prepares for further rate cuts, which would weaken the pound relative to the lower-yielding yen.

Geopolitical tensions further add to market caution, potentially limiting GBP/JPY's upside. As such, it is prudent to wait for a clear resurgence of buying interest to confirm the end of the recent correction from the 201.25 area—last week's high, which also marked a monthly peak and the strongest level since July 2024—before considering new long-term buys. The release of the UK's preliminary PMI data may provide important insights into the state of the economy and influence sterling, opening short-term trading opportunities in the GBP/JPY pair.

From a technical perspective, prices are trading below the 9- and 14-day EMAs, confirming market weakness. However, oscillators on the daily chart remain positive, leaving room for prices to attempt a recovery and reach the psychological level of 200.00. On the other hand, the pair finds support near the Asian session low around 199.25, below which lies the 199.00 round figure. Failure to hold this level and a drop below the 50-day SMA would increase the likelihood of shifting momentum toward the bears.