GBP/JPY struggles to break above 196.00 ahead of BoJ-BoE monetary policy

• GBP/JPY faces pressure near 196.00, with investors awaiting the BoJ-BoE monetary policy outcome.
• Both the BoJ and the BoE are expected to leave interest rates at their current levels.
• Investors will also focus on the UK CPI data for May, which will be released on Wednesday.

The GBP/JPY pair struggles to extend its upside above 196.00 from the last three trading sessions. During Asian trading hours on Monday, the cross has faced pressure near 196.00 again and has ticked down to near 195.50.

It seems that the cross will take a decisive break on either side after monetary policy announcements by the Bank of Japan (BoJ) and the Bank of England (BoE) on Tuesday and Thursday, respectively.

On Tuesday, the BoJ is expected to leave interest rates steady at 0.5% as officials need to be convinced that the underlying inflation will return around 2% before supporting further policy-tightening. BoJ officials have warned that the tariff policy by United States (US) President Donald Trump could impact its economic growth.

A Reuters poll in the June 2-10 period showed that none of the economists expected the Japanese central bank to raise its key borrowing rate in the monetary policy announcement on June 17. The survey also showed that a slight majority of economists expect the BoJ to keep interest rates steady at 0.5% by the year-end and hike in early 2026.

Meanwhile, the Bank of England (BoE) is also expected to keep interest rates steady at 4.25% on Thursday, as officials guided a "gradual and careful" monetary expansion approach in the last policy meeting, following a 25-basis-point (bps) rate reduction. Investors doubt that the BoE will maintain a moderate policy-easing guidance due to slowing labor market growth and faster-than-projected economic contraction in April.

Ahead of the BoE policy, investors will also focus on the United Kingdom (UK) Consumer Price Index (CPI) data for May, which is scheduled to release on Wednesday.