GBPJPY has rebounded off multi-year lows at 1.27 this year and currently we're in a consoldation area. I don't think much has changed in terms of the Pounds fundamentals but one thing that may have given us strength and may continue to give us strength, is the possibility that Britain does not leave the EU after all. There's a couple of scenarios I see happening soon.
1) EU is structurally weaker after the coronavirus, countries not able to recover/flourish because monetary policy is in the hands of the ECB and monetary policy is not easy to implement. Therefore more members favour Britain to return and negotiate a better deal for themselves.
2) Boris Johnson has a vote of no-confidence after dropping the ball on coronavirus. Regardless if it's true or not, the politics will take full advantage. This opens the door for someone at the head of Britain open to returning to the EU.
3. Britain get a much better withdrawal deal as both economies suffer a recession and are forced to put the economy first.
1) EU is structurally weaker after the coronavirus, countries not able to recover/flourish because monetary policy is in the hands of the ECB and monetary policy is not easy to implement. Therefore more members favour Britain to return and negotiate a better deal for themselves.
2) Boris Johnson has a vote of no-confidence after dropping the ball on coronavirus. Regardless if it's true or not, the politics will take full advantage. This opens the door for someone at the head of Britain open to returning to the EU.
3. Britain get a much better withdrawal deal as both economies suffer a recession and are forced to put the economy first.