Insights 
VT 
The British Pound extended its losses on Monday, reaching a one-week low at 201.35 against the Yen. This decline was driven by a weaker UK employment report and concerns over renewed Sino-US trade tensions. The UK jobless rate unexpectedly rose to 4.8% for the three months up to August, compared to 4.7% in July, with net employment increasing by just 91K from 232K in July.
Technically, the Pound’s reversal from 203.50 against the Yen suggests a declining trend since early October’s 205.33 high. The 4-hour RSI remains below 40, indicating bearish momentum. Prices hover near weekly lows at 201.35, with 200.40 identified as the next target, corresponding to September 26 highs and October 6 lows. A previous support level at 202.00 has turned into resistance, with 203.50 acting as a barrier before the October 8 high at 206.35.
Currency Performance
In currency performance, the British Pound showed varied results, being strongest against the Australian Dollar. It experienced losses of 0.65% against the Yen and 0.53% against the Euro. The currency heat map provides percentage changes between major currencies, with the British Pound generally underperforming against others.
The Pound’s recent failure to hold above 203.50 signals that the bears are in control for now. We see the price has broken down to the 201.35 area, a new one-week low, which confirms the downward momentum. This move is being driven by fundamental weakness in the UK economy.
Recent data confirms this view, with the UK jobless rate unexpectedly climbing to 4.8% in the numbers released for August 2025. Adding to this, the latest inflation figures for September 2025 came in at 2.9%, which is higher than the Bank of England’s target and complicates their ability to support the economy. This combination of rising unemployment and sticky inflation suggests a tough period ahead for the Pound.
Global Economic Mood
Globally, the mood is also turning sour due to renewed trade tensions between the US and China. This risk-off sentiment is strengthening the Japanese Yen, which investors traditionally flock to for safety. This dual pressure of a weak Pound and a strong Yen is the primary driver behind GBP/JPY’s sharp decline.
For derivative traders, this setup makes buying put options on GBP/JPY an attractive strategy. With key support levels identified at 200.40 and then down at the 198.85 gap, puts with strike prices around 200.00 could offer a good risk-reward profile over the next few weeks. This allows us to capitalize on further downside while strictly defining our maximum potential loss.
Volatility in this pair is notoriously high, and the current economic backdrop suggests this will continue. We remember the sharp, unpredictable moves during the UK mini-budget crisis back in late 2022, which serves as a reminder of how quickly this pair can trend. Therefore, using options to express a bearish view is preferable to shorting futures directly, as it helps manage the risk of sudden price spikes against our position.
