During the Asian session, the GBP/JPY pair has extended its recovery rise to near 170.75. The cross aims to re-establish its weekly high above 171.00 as investors anticipate another interest rate increase from the Bank of England (BoE) to combat double-digit inflation in the United Kingdom.

This would be Governor Bailey's twelfth consecutive interest rate increase. As anticipated, the BoE will increase interest rates by 25 basis points (bps) to 4.50 percent. Due to labor shortages and historically high food inflation, the UK's inflation has remained extremely persistent. In addition, businesses in the United Kingdom intend to pass on the impact of increased wages to final consumers, which would exacerbate the BoE's difficulties.

On the front of the Japanese Yen, investors anticipate the publication of the Bank of Japan's (BoJ) Summary of Opinions, which will provide a detailed explanation for the continuation of ultra-dovish monetary policy.

After reaching a seven-year high of 172.33 on a weekly scale, the GBP/JPY pair is in the process of adjusting its inventory. The cross is required in order to gather fortitude for a new rally. The 10-period Exponential Moving Average (EMA) with an upward slope at 166.87 is providing support to the bulls in Pound Sterling.

The Relative Strength Index (14) has moved into the bullish range of 60.00-80.00, indicating the initiation of an uptrend.

A confident move above the previous week's high of 172.33 will help the cross reach a new seven-year high of 173.00, followed by the 25 January 2016 high of 174.18.

In contrast, a collapse below the low of May 09, 169.85, will further drag the asset toward the low of May 03, 169.14. A breach below the latter will further drag the asset toward the 168.00-point low of 5 May.