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• GBP/JPY flatlines around 212.50, halfway through the weekly range.
• Investors are wary of placing Yen shorts as intervention risk remains high.
• Pound traders are bidding their time, awaiting the outcome of local elections in the UK.

The Pound (GBP) trades practically flat around 212.50 against the Japanese Yen (JPY) on Thursday. Investors are wary of selling JPY amid risks of intervention by the Japanese Ministry of Finance (MOF), while the uncertainty about the results of the UK local elections is keeping traders away from the Pound.

The pair trades halfway through the weekly range between 210.50 and 214.20 after dropping from last week’s highs at 216.60 on a suspected Tokyo intervention to support the Yen, which is thought to have had some follow-through this week.

Japanese Ministry of Finance Satsuki Takayama has repeated that the authorities are committed to taking “decisive action” against speculative moves several times over the last few days. 

On Thursday, Japan’s top currency diplomat, Atsushi Mimura, said that the MOF faces no constraints on how often it can step in to support the Yen and that he is in daily contact with US authorities, which has served as a verbal warning against speculative JPY sellers. 

In the UK, voters are heading to the polls to elect 136 local authorities as well as the parliaments of Scotland and Wales, which are likely to deliver a significant setback to the ruling Labour Party. If this outcome is confirmed, it might trigger a political crisis, with the outlook of a government change renewing concerns about fiscal stability, which have been subdued for some time.

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