On Thursday, the GBP/JPY pair corrected to just below the round level of 208.00 in an attempt to attract buyers. At that time, spot prices traded in the range of 208.30–208.50, remaining near levels not seen since 2008.

Investors remain concerned about Japan's deteriorating economic and financial situation amid Prime Minister Sanae Takachi's plan for significant expenditures and weak economic growth. These factors vastly overshadow the Bank of Japan's hawkish sentiments and are among the primary drivers of the Japanese yen's weakness, thereby supporting the GBP/JPY pair.

However, the extent of the yen's decline is constrained by expectations of an interest rate hike by the BOJ at its monetary policy meeting scheduled for next week. These expectations are reinforced by remarks made earlier this week by central bank Governor Kazuo Ueda, who noted that the likelihood of achieving the baseline economic and inflation forecast is increasing. This mindset, coupled with a softer risk appetite, may support the Japanese yen as a safe-haven asset.

Moreover, the hawkish stance of the BOJ significantly contrasts with expectations of a potential interest rate cut by the Bank of England next week, which makes traders cautious about opening new long positions on this pair.

However, the primary focus should be on the upcoming key events from the central banks: the BoE's monetary policy update next Thursday and the BOJ's rate decision next Friday. These events will significantly impact the direction of the GBP/JPY pair and help determine the next phase of the trend.

From a technical perspective, oscillators on the daily chart are positive, suggesting the pair is in a corrective phase.

The nearest resistance for the pair is at 208.90, while support is found at the round level of 208.00. The next support level is 207.75, near the 9-day EMA. A breakout below this level would bring prices back into the previous range.