GBP/JPY gives up some intraday gains after BoE holds interest rates steady at 4%

• GBP/JPY pares some of its early gains after the BoE's monetary policy announcement.
• The BoE held interest rates steady at 4% with a 7-2 majority, as expected.
• Investors await Japan's National CPI data for August and the BoJ's monetary policy outcome.

The GBP/JPY pair gives back some of its early gains during the late European trading session on Thursday. Still, the pair trades 0.2% higher to near 200.70. The asset faces selling pressure after the monetary policy announcement by the Bank of England (BoE), in which it held interest rates steady at 4%, as expected.

The BoE maintains the status quo with a 7-2 majority as household inflation expectations remain elevated. The rate-setting committee has stated that it will remain focused on squeezing out any "existing or emerging persistent inflationary pressures, to bring inflation sustainably to its 2% target in the medium term".

Two BoE Monetary Policy Committee (MPC) members who voted for a further 25 basis points (bps) reduction in interest rates were Swati Dhingra and Alan Taylor. The BoE reduced its key borrowing rates by 25 bps in August.

The BoE sees inflation peaking 4% in September and has retained their "gradual and careful" monetary expansion guidance.

Meanwhile, the Japanese Yen (JPY) underperforms its peers, except the New Zealand Dollar (NZD), ahead of the release of the National Consumer Price Index (CPI) data for August and the Bank of Japan's (BoJ) monetary policy announcement on Friday. National CPI ex. Fresh Food is estimated to have grown at an annual pace of 2.7%, slower than the prior reading of 3.1%.

The BoJ is expected to keep interest rates on hold at 0.5% and might keep the door open for an interest rate hike in the remainder of the year.