Trading GBP/JPY

Every day investors from all over the world fire up their computers to start day trading the GBP/JPY, otherwise known as the ‘Beast,’ ‘Dragon’ or ‘Geppy.’ This page will look at the history of the GBP/JPY currency pair, as well as its benefits and risks, including notable volatility and liquidity. We then break down strategy, charts, technical analysis, trading hours, plus investing tips for 2024.

GBP/JPY Trading Brokers

  1. OANDA US - OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.
  2. Vantage - Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.
  3. IC Markets - IC Markets maintains its commitment to providing exceptionally tight 0.0-pip forex spreads on major currency pairs such as EUR/USD. This makes it an excellent option if you are seeking superior execution, with an average of 35 milliseconds. Additionally, if you are a high-volume trader, you can benefit from rebates of up to $2.50 per forex lot.
  4. AvaTrade - AvaTrade offers 50+ currency pairs with competitive spreads from 0.9 pips and zero commissions. You can trade majors, minors and exotics around the clock on industry-leading platforms, including MT4 and MT5. Traders can also access beginner-friendly trading tools and comprehensive forex education.
  5. FOREX.com - FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.

Trading GBP/JPY Comparison

Trading GBP/JPY Comparison
Broker Forex Assets EUR/USD Spread Forex App Rating Minimum Deposit Regulator Visit
OANDA US logo
65+ 1.6
$0 NFA, CFTC Visit
Vantage logo
55+ 0.0
$50 FCA, ASIC, FSCA, VFSC Visit
IC Markets logo
75 0.02
$200 ASIC, CySEC, FSA Visit
AvaTrade logo
50+ 0.9
- ASIC, CySEC, FSCA, ISA, CBol, FSA, FSRA, BVI, ADGM Visit
FOREX.com logo
80+ 1.2
$100 NFA, CFTC, CIRO, FCA, CYSEC, ASIC, SFC, FSA, MAS, CIMA Visit
Pepperstone logo
100+ 0.1
$0 FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB Visit
XM logo
55+ 1.6
$5 ASIC, CySEC, DFSA, FSC, FSCA Visit
Eightcap logo
50+ 0.0
$100 ASIC, FCA, xCySEC, SCB Visit
PrimeXBT logo
45+ Variable
$0 - Visit
IQ Option logo
60+ 14 pips
$10 - Visit
BDSwiss logo
50+ 1.2
$10 FSC, FSA Visit
FxPro logo
70+ 1.58 pips (Ave)
$100 FCA, CySEC, FSCA, SCB, FSC Visit
FXCC logo
70+ 0.2
$0 CySEC Visit
XTB logo
70+ 1.0
$0 FCA, CySEC, KNF, CNMV, DFSA, FSC Visit
Plus500 logo
60+ 0.6
$100 FCA, ASIC, CySEC, DFSA, MAS, FSA, FSCA, FMA, EFSA Visit

#1 - OANDA US

Why We Chose OANDA US

OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.

"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."

- DayTrading Review Team
  • GBPUSD Spread: 3.4
  • EURUSD Spread: 1.6
  • EURGBP Spread: 1.7
  • Total Assets: 65+
  • Leverage: 1:50
  • Platforms: OANDA Trade, MT4, TradingView, AutoChartist

About OANDA US

OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.

Pros

  • Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
  • The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView
  • Beginners can get started easily with $0 minimum initial deposit

Cons

  • The range of day trading markets is limited to forex and cryptos only
  • There's only a small range of payment methods available, with no e-wallets supported
  • It's a shame that customer support is not available on weekends

#2 - Vantage

Why We Chose Vantage

Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.

"Vantage remains an excellent option for CFD traders seeking a tightly-regulated broker with access to the reliable MetaTrader platforms. The fast sign-up process and $50 minimum deposit make it very straightforward to start day trading quickly."

- DayTrading Review Team
  • GBPUSD Spread: 0.5
  • EURUSD Spread: 0.0
  • EURGBP Spread: 0.5
  • Total Assets: 55+
  • Leverage: 1:500
  • Platforms: ProTrader, MT4, MT5, TradingView, DupliTrade

About Vantage

Founded in 2009, Vantage offers trading on 1000+ short-term CFD products to over 900,000 clients. You can trade Forex CFDs from 0.0 pips on the RAW account through TradingView, MT4 or MT5. Vantage is ASIC-regulated and client funds are segregated. Copy traders will also appreciate the range of social trading tools.

Pros

  • It’s quick and easy to open a live account – taking less than 2 minutes
  • There are no short-term strategy restrictions with hedging and scalping permitted
  • The ECN accounts are very competitive with spreads from 0.0 pips and a $1.50 commission per side

Cons

  • It's a shame that some clients will need to register with the offshore entity, which offers less regulatory protection
  • Unfortunately, cryptos are only available for Australian clients
  • The average execution speeds of 100ms to 250ms are slower than alternatives based on tests

#3 - IC Markets

Why We Chose IC Markets

IC Markets maintains its commitment to providing exceptionally tight 0.0-pip forex spreads on major currency pairs such as EUR/USD. This makes it an excellent option if you are seeking superior execution, with an average of 35 milliseconds. Additionally, if you are a high-volume trader, you can benefit from rebates of up to $2.50 per forex lot.

"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."

- DayTrading Review Team
  • GBPUSD Spread: 0.23
  • EURUSD Spread: 0.02
  • EURGBP Spread: 0.27
  • Total Assets: 75
  • Leverage: 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
  • Platforms: MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade

About IC Markets

IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.

Pros

  • You have access to over 2,250 CFDs across various markets, including forex, commodities, indices, stocks, bonds, and cryptocurrencies, allowing for diversified trading strategies.
  • With ultra-fast execution speeds averaging 35 milliseconds and deep liquidity, IC Markets provides an optimal trading environment for scalpers, hedgers, and algorithmic traders.
  • As a tightly regulated and widely respected broker, IC Markets prioritizes client security and transparency, helping to ensure a reliable trading experience globally.

Cons

  • There are fees for certain withdrawal methods, including a $20 wire charge, which can eat into profits, especially for frequent withdrawals.
  • The breadth and depth of tutorials, webinars and educational resources still need work, trailing alternatives like CMC Markets and reducing its suitability for beginners.
  • Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.

#4 - AvaTrade

Why We Chose AvaTrade

AvaTrade offers 50+ currency pairs with competitive spreads from 0.9 pips and zero commissions. You can trade majors, minors and exotics around the clock on industry-leading platforms, including MT4 and MT5. Traders can also access beginner-friendly trading tools and comprehensive forex education.

"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."

- DayTrading Review Team
  • GBPUSD Spread: 1.5
  • EURUSD Spread: 0.9
  • EURGBP Spread: 1.5
  • Total Assets: 50+
  • Leverage: 1:30 (Retail) 1:400 (Pro)
  • Platforms: WebTrader, AvaTradeGO, AvaOptions, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade

About AvaTrade

AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, alongside a comprehensive education center and multilingual customer support.

Pros

  • There's a great range of fee-free deposit methods, including bank wire, credit cards and popular e-wallets like Skrill
  • The broker offers reliable 24/5 multilingual customer support with fast response times during testing
  • Automated trading is supported through MetaTrader Expert Advisors (EAs), as well as the AvaSocial and DupliTrade tools

Cons

  • A high $2000 minimum investment is required to use DupliTrade, which will be out of reach for many beginners
  • There is no ECN account with raw spreads
  • Traders from the US are not accepted

#5 - FOREX.com

Why We Chose FOREX.com

FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.

"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."

- DayTrading Review Team
  • GBPUSD Spread: 1.3
  • EURUSD Spread: 1.2
  • EURGBP Spread: 1.4
  • Total Assets: 80+
  • Leverage: 1:200 (Retail), 1:500 (Pro)
  • Platforms: MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral

About FOREX.com

Founded in 1999, FOREX.com is now part of StoneX, a financial services organization serving over one million customers worldwide. Regulated in the US, UK, EU, Australia and beyond, the broker offers thousands of markets, not just forex, and provides excellent pricing on cutting-edge platforms.

Pros

  • The in-house Web Trader continues to shine as one of the best-designed platforms for aspiring day traders with a slick design and over 80 technical indicators for market analysis.
  • Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
  • There’s a wealth of educational resources including tutorials, webinars, and a stacked YouTube channel to help you get educated in the financial markets.

Cons

  • Despite increasing its range of instruments, FOREX.com's product portfolio is still limited to forex and CFDs, so there are no options to invest in real stocks, real ETFs or real cryptocurrencies.
  • There’s no negative balance protection for US clients, so you may find yourself owing more money than your initial deposit into your account.
  • Demo accounts are frustratingly time-limited to 90 days, which doesn’t give you enough time to test day trading strategies effectively.

Chart

GBP/JPY Trading Explained

What does GBP/JPY mean? It is the relative value of the British pound against the value of the Japanese yen. Both are traded enough to qualify them amongst the top six global currencies. Today the yen accounts for around 16.8% of trading volume, while the pound represents approximately 12.8% of forex volume. The pair is considered a ‘cross.’ This means the US dollar is not used when calculating the exchange rate.

Why Day Trade GBP/JPY?

With so many currency pairs and trading vehicles available, including ETFs, futures, and options, why does the GBP/JPY warrant your attention?

Drawbacks & Risks

Downsides to day trading GBP/JPY include:

Influences on Movement

Energy Commodities

The relationship between the Japanese yen and energy pricing can have a significant impact for investing. Japan buys crude oil and natural gas to satisfy domestic energy requirements. In 2020, Japan was the 4th biggest importer of crude oil and second for natural gas.

There is a strong link between the price of the Japanese yen and the price of energy commodities. Historical data shows that when global energy prices shift, the yen usually moves in line with them. This has a knock-on effect on the GBP/JPY.

Other Factors

Investors can feel wars and natural disasters in the GBP/JPY relationship. The savvy day trader won’t just focus on charts from Yahoo and historical data. They will keep track of multiple global factors using various sources.

Currency Correlations

Foreign exchange currencies do not move independently of each other. Because they are traded in pairs, their movements are tied to the movements of other pairs.

For example, if you are trading the GBP/JPY, you are handling a derivative of the GBP/USD and USD/JPY pairs. This means that GBP/JPY is related to either or both of the other pairs. The problem is they can move with each other and in the opposite direction. Plus, their correlation can change.

Correlation is a statistical measure ranging from -1 to +1. The former is when currency pairs move in opposite directions and the latter when they move together.

Calculation

The best way to understand how this knowledge can assist you day trading the GBP/JPY is to be the correlation calculator yourself. All you need is an Excel spreadsheet:

  1. Input price data from your currency pairs, GBP/JPY, for example
  2. Create two columns, one for each pair
  3. Fill the columns with the past daily prices over the period you are interested in
  4. Type =CORREL in an empty box at the bottom
  5. Highlight all the data in a column, and you will get a range of cells in the formula box. Type in a comma
  6. Now repeat steps 3 to 5 for the other currency
  7. Close the formula. It will then look like =CORREL (A1: A25, B1: B25)

The final figure is the correlation between the two currency pairs.

GBP/JPY Day Trading Strategy

Timing

Whether you opt for a breakout or scalping strategy, timing is essential. So, when is the best time to trade GBP/JPY? You want to focus your trading around key economic releases at 01:30, 02:00, 08:30, and 10:00 EST. Also, consider the Asian European overlap, which runs from 00:00 to 03:00 EST. This is when you will see the most liquidity for the Japanese yen, plus the European yen crosses.

Breakout Strategies

The volatility of the GBP/JPY means the pair can trade wide swings in either direction, making trading breakouts an appealing technique. You can capitalize on profits when big swings are correct and minimize losses when they move against you. A top tip is to regularly monitor your support and/or resistance lines and levels because the volatility can cause severe fluctuations in a short time frame.

20 Pips GBP/JPY Scalping Strategy

This method is straightforward. You use 5-minute time frames and free GBP/JPY signals. You will also need 25 exponential moving averages (EMAs) on the indicator front.

When the price is above 25 EMA, you are seeing an uptrend. When the price is below 25 EMA, it is considered a downtrend. The angle of the trend is essential. A relatively horizontal angle means the market is ranging. There is a solid trend if the angle is around 30 degrees or higher.

Buy Setup

Sell Setup

Because the range of the GBP/JPY can be anywhere from 150-200 pips a day, there is ample scalping opportunity. However, be warned this system may underperform in ranging, non-trending markets.

Trade Size

Whatever your strategy, the GBP/JPY can turn bullish or bearish quickly. You must set stop losses wide, with small lot sizes. You may even want to consider cutting your trade size to around a third. This allows you to aim for higher targets and reduce potential losses in a volatile currency pair.

Summing Up Strategy

One person’s best GBP/JPY strategy may not generate consistent profits for another investor. The trick is finding a strategy that compliments your trading style. Some focus on bar charts and daily pivot points, while others prefer economic calendars and news events.

For more guidance, see our strategy page.

History

Early History

The British pound is thought to be the oldest currency in the world still in use. A turning point came in 1940 with the Bretton Woods agreement. The pound pegged to the US dollar rate at £1 = $4.03. A system that was used to govern post-war exchanges for the next thirty years.

The Japanese yen, which means ‘circle’ or ’round object,’ is much younger than its British pound counterpart. The Meiji government introduced it in 1871 to replace the unstable Edo period, where no standard currency exchange existed. However, the yen lost its value during World War II. From 1949 to 1971, the yen was equivalent to 1 US dollar.

Global Credit Crunch

A critical period in the currency pair’s relationship was the global financial crisis of 2008. Between 2007 and 2009, the pound was clearly under pressure. In response to this, it weakened against the yen. GBP/JPY traded from a high of 250.13 to a low of 121.21, a staggering decline of over 50%.

Brexit

The Brexit decision of 2016 also had far-reaching implications. Although the repercussions were felt for less time than the crunch of 2008, volatility was still substantial. In June 2016, the GBP/JPY traded from a high of 160.66 to a low of 133.31.

Covid-19

To mitigate the effects of COVID-19, Japan authorized a US$1.1 trillion stimulus plan in May 2020. In addition, the BoJ bought ETFs and pumped huge amounts of yen and foreign currency into the financial markets.

The British government created a £30 billion stimulus package in August 2020. It included lowering interest rates to near-zero, financing £190 billion to companies, and buying £435 billion in government bonds. Throughout 2020, the pair traded between a high of 144.78 and a low of 127.55.

However, the all-time records for this currency pair weren’t at either of these periods. Instead, they were:

Role of the Great British Pound

Before you start focussing on your GBP/JPY trading signals and system, it helps to have some context about the role these two currencies play.

Although the UK is relatively small in size, its economy is one of the largest in the world. It plays a leading role in international financial markets. London is thought of as the forex trading capital of the world.

The UK was at one time the global superpower, with the largest economy on the planet for over one hundred years. The British pound was considered the world’s unofficial reserve currency. However, the world wars sparked a decline. Stringent government regulations and restricted labor markets further impacted the economy.

The economy has since stabilized partially due to the UK’s role as a key global player in financial services.

Role of the Japanese Yen

Japan is one of the biggest economies in the world, boasting one of the highest GDPs, plus it is a huge exporter. However, it has had a challenging few decades. Low fertility rates and an ageing workforce have also made taxation and consumption a constant battle.

Despite troubles, their workforce is well-educated, and while industries such as shipbuilding have moved to China and South Korea, Japan remains a leading manufacturer of electronics and technological components. Japan is now heavily reliant on China as a trade partner.

The main driving forces are interest rates and price action. However, there are other economic data releases that traders should keep an eye out for:

Google Finance, Yahoo Finance, Bloomberg, and Reuters are good GBP/JPY news resources. For truly yen-specific information, the Tankan survey is particularly useful. This is published quarterly online by the BoJ.

Final Word on GBP/JPY Day Trading

The GBP/JPY is thought of as a gauge for global economic health, as it reflects issues affecting both Western Europe’s monetary policies and those in the Asia-Pacific region. Phenomenal volatility and wide trading ranges attract vast numbers of day traders.

Success will be no easy challenge when you open up your live forex chart. You will need an understanding of how and what influences each currency and economy, fundamental analysis, charts, patterns, and the news to spot potential opportunities. Only then can you begin your journey to join the likes of famous forex traders, Ed Seykota and Richard Dennis.

For more guidance, see our forex day trading page.

FAQ

What Does GBP/JPY Mean?

GBP stands for Great British pound and JPY for Japanese yen. GBP/JPY is the forex exchange pair these two currencies generate. With it, you can speculate on the price movement between GBP and JPY.

Is GBP/JPY A Good Pair To Trade?

The pair is highly volatile and suitable for investors who can manage such conditions. Volatility is great for day or short-term trading as it offers plenty of opportunities to take advantage of the price fluctuations.

What Is The Best Time To Trade GBP/JPY?

GBP/JPY moves the most when the London and the Japan markets are opened at the same time, between 03:00 and 04:00 EST. This creates liquidity and substantial price movements.

Why Is The GBP/JPY Highly Volatile?

Both GBP and JPY are highly volatile currencies; when combined, this results in an exciting pairing. GBP/JPY is also tied to distinct types of economies, which creates big up and down swings in price. The pair also has ample liquidity due to its popularity.

What Affects GBP/JPY?

Some of the most impactful factors include energy prices and government policies. Japan is a big importer of crude oil and natural gas. JPY is highly dependent on the cost of energy. The UK is one of the most influential economies in the world. Its policies often have a knock-on effect on regional and international markets.