GBP/JPY rebounds to near 193.50 as BoE Pill warns caution on interest rate cuts

• GBP/JPY recovers from 192.00 as the Japanese Yen loses strength on potential US-Japan trade talks.
• Japan's Akazawa is scheduled to visit Washington later this week.
• Investors await the UK CPI data for fresh cues on the BoE's monetary policy outlook.

The GBP/JPY pair attracts bids near 192.00 and flattens around 193.50 during North American trading hours on Tuesday. The cross bounces back as the Japanese Yen (JPY) loses strength after Tokyo announced the meeting with Washington this week for the third-round trade talks.

Earlier in the day, Japan's Kyodo News agency reported that top trade negotiator Ryosei Akazawa will visit Washington for trade discussions later this week. Later in the European session, the news agency also reported that Japan is mulling accepting lower US tariff rates, and not demanding an exemption.

Meanwhile, the Pound Sterling (GBP) trades calmly ahead of the United Kingdom (UK) Consumer Price Index (CPI) data for April, which will be released on Wednesday. According to the estimates, the UK headline CPI rose at a robust pace of 3.3%, compared to 2.6% in March. The core CPI - which strips off volatile components such as food, energy, alcohol, and tobacco - accelerated to 3.6% from the prior release of 3.4%.

Signs of hot UK inflation data would discourage Bank of England (BoE) officials from cutting interest rates again in the June meeting. The BoE reduced its borrowing rates by 25 basis points (bps) to 4.25% and guided a "gradual and cautious" monetary policy expansion approach.

Meanwhile, BoE Chief Economist Huw Pill has advised caution on interest rate cuts. Pill stated during European trading hours that "inflation pressure indicators give me cause for concern". Pill was one of two BoE policymakers who voted to leave interest rates unchanged.