The GBP/JPY pair is currently facing downward pressure for the fourth consecutive day, trading just above the mid-187.00s. Despite lingering above the weekly trough, the pair lacks significant follow-through selling and remains within the previous day’s trading range during the first half of the European session.

Geopolitical risks, particularly concerns about the Israeli-Hamas conflict escalating into a broader regional conflict, are contributing to a risk-averse sentiment among investors. This has prompted a generally weaker tone in equity markets, leading to increased demand for the Japanese Yen (JPY) as a safe-haven currency. The uncertain global economic outlook further dampens investor appetite for riskier assets, acting as a headwind for the GBP/JPY cross.

Additionally, the Japanese Yen is benefiting from geopolitical risks despite weaker Tokyo Consumer Price Index (CPI) data, which has capped the gains for the GBP/JPY pair. Furthermore, expectations that the Bank of England (BoE) will maintain interest rates near a 16-year high are helping limit the downside for the pair.