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Trading GBP/JPY

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Written By
Jemma Grist
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Written By
Jemma Grist
Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.
» Jemma Grist Profile Page
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Edited By
Tobias Robinson
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Edited By
Tobias Robinson
Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.
» Tobias Robinson Profile Page
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Fact Checked By
William Berg
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Fact Checked By
William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
» William Berg Profile Page
Updated
Jul 24, 2024

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

Click a broker for details
  1. 1
    FOREX.com
    Active Trader Program With A 15% Reduction In Costs
    Ratings
    4.9 / 5
    4 / 5
    4.3 / 5
    4.6 / 5
    4.6 / 5
    4.3 / 5
    4.8 / 5
    4.5 / 5
    3.6 / 5
    3.8 / 5
    $100
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Stocks, Futures, Futures Options
    MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
    Wire Transfer, Credit Card, Debit Card, Visa, Mastercard, Skrill, Neteller, ACH Transfer
    USD, EUR, GBP, CAD, AUD, JPY, CHF, PLN
    Go To FOREX.com
  2. 2
    NinjaTrader
    Ratings
    4.3 / 5
    2.8 / 5
    2.9 / 5
    4.3 / 5
    4.5 / 5
    4 / 5
    4 / 5
    3.5 / 5
    3 / 5
    3.2 / 5
    $0
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Stocks, Options, Commodities, Futures, Crypto
    NinjaTrader Desktop, Web & Mobile, eSignal
    ACH Transfer, Debit Card, Wire Transfer
    USD
    Go To NinjaTrader
  3. 3
    OANDA US
    CFDs are not available to residents in the United States.
    Ratings
    4.5 / 5
    3.5 / 5
    2.8 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.3 / 5
    3.8 / 5
    4.7 / 5
    3.7 / 5
    $0
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)
    OANDA Trade, MT4, TradingView, AutoChartist
    Wire Transfer, Visa, Mastercard, Debit Card, ACH Transfer
    USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD
    Go To OANDA US
  4. 4
    IG
    Forex trading involves risk. Losses can exceed deposits.
    Ratings
    4.9 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.8 / 5
    4.5 / 5
    4.9 / 5
    5 / 5
    4.6 / 5
    4 / 5
    $0
    0.01 Lots
    1:30 (Retail), 1:250 (Pro)
    FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
    Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
    PayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit Card
    USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD
    Go To IG
  5. 5
    Interactive Brokers
    Ratings
    4.5 / 5
    3.5 / 5
    4.5 / 5
    4.3 / 5
    3.3 / 5
    3 / 5
    4.4 / 5
    4.3 / 5
    4.3 / 5
    4.5 / 5
    $0
    $100
    1:50
    FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA
    Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies
    Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
    Cheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit Card
    USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF
    Go To Interactive Brokers
  6. 6
    Videforex
    20% to 200% Deposit Bonus
    $250
    $0.01
    1:500
    Binary Options, CFDs, Forex, Indices, Commodities, Crypto
    TradingView
    Skrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum Payments
    USD, EUR, GBP, AUD, RUB
    Go To Videforex
  7. 7
    IQCent
    20% to 200% Deposit Bonus
    Ratings
    2.5 / 5
    3.3 / 5
    2.4 / 5
    4.3 / 5
    3.8 / 5
    2.5 / 5
    3 / 5
    2 / 5
    4.3 / 5
    4.1 / 5
    $250
    $0.01
    1:500
    IFMRRC
    Binary Options, CFDs, Forex, Indices, Commodities, Crypto
    Online Platform, TradingView
    Credit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, Mastercard
    USD, EUR
    Go To IQCent
  8. 8
    RedMars
    Ratings
    3.3 / 5
    3.5 / 5
    3.8 / 5
    3.5 / 5
    3.8 / 5
    4 / 5
    2.8 / 5
    3 / 5
    4.7 / 5
    4.6 / 5
    €250
    0.01 Lots
    1:30 (Retail), 1:500 (Pro)
    CySEC
    CFDs, Forex, Stocks, Indices, Commodities, Cryptos
    MT5
    Credit Card, Wire Transfer, Debit Card, Sticpay, FasaPay, Bitcoin Payments, Trustly, PayPal, Skrill, Neteller, Klarna, Mastercard, Visa
    USD, EUR
    Go To RedMars
  9. 9
    Plus500 US
    Welcome Deposit Bonus up to $200
    Trading with leverage involves risk.
    Ratings
    3.5 / 5
    3.7 / 5
    3.5 / 5
    3.3 / 5
    3.3 / 5
    3.5 / 5
    2.8 / 5
    3.5 / 5
    4.1 / 5
    4.3 / 5
    $100
    0.0 Lots
    CFTC, NFA
    Futures on Forex, Commodities, Cryptos, Indices, Interest Rates
    WebTrader, App
    ACH Transfer, Wire Transfer, Debit Card, Mastercard, Visa
    USD
    Go To Plus500 US
  10. 10
    xChief
    $100 No Deposit Bonus
    $10
    0.01 Lots
    1:1000
    VFSC
    CFDs, Forex, Metals, Commodities, Stocks, Indices
    MT4, MT5
    Wire Transfer, Bitcoin Payments, Credit Card, UnionPay, Skrill, Neteller, WebMoney, Perfect Money, Debit Card, Ethereum Payments, FasaPay, Volet
    USD, EUR, GBP, JPY, CHF
    Go To xChief

Here is a short summary of why we think each broker belongs in this top list:

  1. 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.
  2. NinjaTrader - NinjaTraders supports the trading of popular currencies including the EUR/USD. The software also offers advanced features to streamline the trading experience, including complex order types like market if touched (MIT) and one cancels other (OCO).
  3. 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.
  4. IG - IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.
  5. Interactive Brokers - IBKR presents an extensive range of over 100 major, minor, and exotic forex pairs, surpassing the offerings of nearly all leading alternatives, though not CMC Markets. Forex trading occurs over multiple platforms and boasts institutional-grade spreads starting from 0.1 pips and 20 complex order types, including brackets, scale, and one-cancels-all (OCA) orders.
  6. Videforex - Trade 35 major, minor and exotic forex pairs through CFDs with floating spreads from 0.1 pips. Alternatively, binary options allow you to speculate on rising and falling prices with a fixed stake and payout.
  7. IQCent - IQCent traders can access CFDs or binary options on 45+ forex pairs. CFD spreads start from 0.3 pips and binary options payouts are decent up to 95%. This is competitive compared to Pocket Option, for example, offering forex payouts up to only 81%.
  8. RedMars - RedMars strongest investment category is forex with more than 50 currency pairs, from majors to minors and exotics. Spreads start from 0.0 pips, catering to active currency traders, and leverage can reach 1:500. However, there are no forex heatmaps or research tools to support aspiring forex traders.
  9. Plus500 US - Plus500 US offers futures trading on a small selection of 13 currencies, including popular pairs like the EUR/USD and GBP/USD. Day trading margins are competitive, starting from $40, while the educational resources do an excellent job of breaking down the basics of forex futures for new traders.
  10. xChief - ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs. Trading takes place on the leading MT4 and MT5 platforms, which offer dozens of in-built technical tools for short-term forex strategies.

Trading GBP/JPY Comparison

Trading GBP/JPY Comparison
Broker Forex Assets EUR/USD Spread Forex App Rating Minimum Deposit Regulator
FOREX.com logo
80+ 1.2 4.9 / 5 $100 NFA, CFTC
NinjaTrader logo
50+ 1.3 3.5 / 5 $0 NFA, CFTC
OANDA US logo
65+ 1.6 4 / 5 $0 NFA, CFTC
IG logo
80+ 0.8 4.9 / 5 $0 FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB
Interactive Brokers logo
100+ 0.08-0.20 bps x trade value 4.3 / 5 $0 FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA
Videforex logo
35 Floating from 0.1 pips 2.5 / 5 $250 -
IQCent logo
49 0.3 3 / 5 $250 IFMRRC
RedMars logo
50+ 0.7 - €250 CySEC
Plus500 US logo
13 0.75 4.3 / 5 $100 CFTC, NFA
xChief logo
40 0.4 - $10 VFSC

FOREX.com

"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."

Christian Harris, Reviewer

FOREX.com Quick Facts

Bonus OfferActive Trader Program With A 15% Reduction In Costs
GBPUSD Spread1.3
EURUSD Spread1.2
EURGBP Spread1.4
Total Assets80+
Leverage1:50
PlatformsMT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, CHF, PLN

Pros

  • 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.
  • FOREX.com offers industry-leading forex pricing starting from 0.0 pips, alongside competitive cashback rebates of up to 15% for serious day traders.
  • With over 20 years of experience, excellent regulatory oversight, and multiple accolades including runner-up in our 'Best Forex Broker' awards, FOREX.com boasts a global reputation as a trusted brokerage.

Cons

  • Funding options are limited compared to leading alternatives like IC Markets and don’t include many popular e-wallets, notably UnionPay and POLi.
  • 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.
  • FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
Visit FOREX.com
FOREX.com Review

NinjaTrader

"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."

Tobias Robinson, Reviewer

NinjaTrader Quick Facts

GBPUSD Spread1.6
EURUSD Spread1.3
EURGBP Spread1.6
Total Assets50+
Leverage1:50
PlatformsNinjaTrader Desktop, Web & Mobile, eSignal
Account CurrenciesUSD

Pros

  • NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
  • You can get thousands of add-ons and applications from developers in 150+ countries
  • Traders can get free platform access and trade simulation capabilities in the unlimited demo

Cons

  • There is a withdrawal fee on some funding methods
  • Non forex and futures trading requires signing up with partner brokers
  • The premium platform tools come with an extra charge
Visit NinjaTrader
NinjaTrader Review

OANDA US

"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."

Jemma Grist, Reviewer

OANDA US Quick Facts

GBPUSD Spread3.4
EURUSD Spread1.6
EURGBP Spread1.7
Total Assets65+
Leverage1:50
PlatformsOANDA Trade, MT4, TradingView, AutoChartist
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD

Pros

  • OANDA is a reliable, trustworthy and secure brand with authorization from tier-one regulators including the CFTC
  • There's a strong selection of 68 currency pairs for dedicated short-term forex traders
  • Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave

Cons

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

IG

"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."

Christian Harris, Reviewer

IG Quick Facts

GBPUSD Spread0.9
EURUSD Spread0.8
EURGBP Spread0.9
Total Assets80+
Leverage1:30 (Retail), 1:250 (Pro)
PlatformsWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD

Pros

  • The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
  • IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis
  • As a well-established broker, IG operates under strict regulatory guidelines in multiple jurisdictions, maintaining a high level of trust

Cons

  • IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors
  • Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges
  • While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients
Visit IG
IG Review

Interactive Brokers

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."

Christian Harris, Reviewer

Interactive Brokers Quick Facts

GBPUSD Spread0.08-0.20 bps x trade value
EURUSD Spread0.08-0.20 bps x trade value
EURGBP Spread0.08-0.20 bps x trade value
Total Assets100+
Leverage1:50
PlatformsTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
Account CurrenciesUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF

Pros

  • With low commissions, tight spreads and a transparent fee structure, IBKR delivers a cost-effective environment for short-term traders.
  • IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.
  • While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.

Cons

  • TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
  • Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
  • IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
Visit Interactive Brokers
Interactive Brokers Review

Videforex

"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts also remain higher than most alternatives climbing to 98%."

William Berg, Reviewer

Videforex Quick Facts

Bonus Offer20% to 200% Deposit Bonus
GBPUSD SpreadFloating from 0.1 pips
EURUSD SpreadFloating from 0.1 pips
EURGBP SpreadFloating from 0.1 pips
Total Assets35
Leverage1:500
PlatformsTradingView
Account CurrenciesUSD, EUR, GBP, AUD, RUB

Pros

  • The firm facilitates both day trading and binary options which is great for those looking to diversify their portfolios
  • Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, which is in line with competing brands like IQCent
  • You can easily mirror the trades of experienced investors with low fees

Cons

  • The broker isn’t overseen by a trusted regulatory agency
  • No MetaTrader 4 integration
  • US clients aren’t accepted due to legal restrictions
Visit Videforex
Videforex Review

IQCent

"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "

Jemma Grist, Reviewer

IQCent Quick Facts

Bonus Offer20% to 200% Deposit Bonus
GBPUSD Spread0.8
EURUSD Spread0.3
EURGBP Spread0.8
Total Assets49
Leverage1:500
PlatformsOnline Platform, TradingView
Account CurrenciesUSD, EUR

Pros

  • The broker offers up to 98% payouts on binary options, which is more than alternatives like Pocket Option, only offering up to 92%
  • Keen traders can take part in trading contests with cash prizes
  • The broker's 24/7 customer support is fast and reliable, responding within 1 minute during tests

Cons

  • There's no automated trading support for algo traders
  • IQCent trails binary brokers like Quotex with its narrow investment offering of around 100 assets with no stocks
  • The broker is not overseen by a respected regulator, though this is common among binary options firms
Visit IQCent
IQCent Review

RedMars

"RedMars is the best fit for experienced day traders familiar with the MetaTrader 5 platform and based in the EU, where the broker is authorized by the CySEC. However, the threadbare education and research tools make it unsuitable for beginners."

Christian Harris, Reviewer

RedMars Quick Facts

GBPUSD Spread0.7
EURUSD Spread0.7
EURGBP Spread1.1
Total Assets50+
Leverage1:30 (Retail), 1:500 (Pro)
PlatformsMT5
Account CurrenciesUSD, EUR

Pros

  • The broker is one of a limited number of firms to offer an account specially designed for VIPs with premium support and invites to exclusive events
  • RedMars offers one of the best platforms for day trading, MT5, hosting 21 timeframes, dozens of analytical tools, flexible templates and algo trading
  • The broker supports a range of flexible payment methods, including wire transfers, credit cards, e-wallets, and notably cryptocurrencies

Cons

  • While RedMars' spreads are within industry averages, they don't offer a significant edge over the cheapest day trading brokers we've personally used, notably IC Markets
  • With just 300 instruments, RedMars offers a narrow trading environment, particularly compared to category leaders like BlackBull Markets which offers 26,000 assets
  • The no-frills trading environment offers little beyond the basics, with no Islamic account, PAMM account or copy trading.
Visit RedMars
RedMars Review

Plus500 US

"Plus500 US stands out as an excellent choice for beginners, offering a very user-friendly platform, low day trading margins, and access to the Futures Academy to enhance trading skills."

Michael MacKenzie, Reviewer

Plus500 US Quick Facts

Bonus OfferWelcome Deposit Bonus up to $200
EURUSD Spread0.75
Total Assets13
PlatformsWebTrader, App
Account CurrenciesUSD

Pros

  • Plus500 is a publicly traded company with a good reputation, over 24 million traders, and a sponsor of the Chicago Bulls, instilling a sense of trust
  • The straightforward account structure, pricing model and web platform offer an easier route into futures trading than rivals like NinjaTrader
  • Plus500 US excels for its low fees with very competitive day trading margins and no inactivity fees, live data fees, routing fees, or platform fees

Cons

  • Plus500 US does not offer social trading capabilities, a feature available at alternatives like eToro US which could strengthen its offering for aspiring traders
  • Although support response times were fast during tests, there is no telephone assistance
  • While Plus500 US continues to broaden its investment offering, it's currently restricted to around 50+ futures with no stocks
Visit Plus500 US
Plus500 US Review

xChief

"xChief continues to prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The broker's rebate scheme and investment accounts will particularly appeal to seasoned traders. However, the lack of top-tier regulatory oversight is a major drawback."

William Berg, Reviewer

xChief Quick Facts

Bonus Offer$100 No Deposit Bonus
GBPUSD Spread0.9
EURUSD Spread0.4
EURGBP Spread0.9
Total Assets40
Leverage1:1000
PlatformsMT4, MT5
Account CurrenciesUSD, EUR, GBP, JPY, CHF

Pros

  • The broker offers several account types to suit different traders, including a Cent account for beginners and pro-level hedging/netting accounts
  • The broker offers a turnover rebate scheme geared towards active investors, as well as trading credits and several other occasional bonuses
  • xChief delivers a high-quality day trading environment via the MT4 and MT5 platforms, with market-leading charts, indicators and tools

Cons

  • The broker trails competitors when it comes to research tools and educational resources
  • xChief is an offshore broker with weak regulatory oversight from the VFSC, so traders will receive limited safeguards
  • Fees and minimums are imposed on most withdrawal methods, including a €60 minimum for SWIFT bank transfers
Visit xChief
xChief Review

Chart

GBPJPY Chart by TradingView

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.

However, the all-time records for this currency pair weren’t during 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.