GBP/JPY refreshes yearly high near 200.00 on Japanese Yen's continued underperformance

• GBP/JPY extends winning streak as the Japanese Yen underperforms due to spoiled trade talks between the US and Japan.
• Japan is reluctant to accept agricultural imports from the US.
• UK government's decision to increase welfare spending led to a sharp decline in the Pound Sterling.

The GBP/JPY pair extends its winning streak for the third trading day on Wednesday. The cross posts a fresh yearly high near 199.85 as the Japanese Yen (JPY) continues to underperform its peers, while United States (US) President Donald Trump imposes 25% tariffs on imports from Japan for failing to close a deal during the 90-day tariff pause.

Over the weekend, US President Trump released letters to 14 nations, outlining tariff rates, for not signing trade pact in which notable name was Japan, who has been consistently negotiating bilateral terms with Washington from weeks and has signaled that it will continue to do so.

Japanese Prime Minister Shigeru Ishiba said on Tuesday that Tokyo would continue negotiations with the US to seek a mutually beneficial trade deal, Reuters reported.

Progress in trade talks between the US and Japan spoiled as Tokyo is reluctant to accept agricultural import, especially rice.

Increasing uncertainty surrounding the US-Japan trade deal is jeopardizing market expectations that the Bank of Japan (BoJ) would raise interest rates again this year.

Meanwhile, the Pound Sterling (GBP) strives to regain composure after sliding significantly last week due to a sharp increase in United Kingdom (UK) gilt yields, following the announcement of an increase in welfare spending bill. 10-year UK gilt yields have increased to near 4.63%, the third highest among developed nations.