GBP/JPY flat lines below 188.00; seems vulnerable ahead of BoE Governor Bailey's speech

• GBP/JPY struggles to capitalize on the overnight modest bounce from a multi-month low.
• Global trade war fears benefit the JPY’s safe-haven status and cap the upside for the cross. 
• The divergent BoJ-BoE policy outlook supports prospects for a further depreciating move.

The GBP/JPY cross finds some support near the 187.40 area during the Asian session on Tuesday, though it lacks follow-through and remains close to a multi-month low touched the previous day. Spot prices currently trade around the 187.85 region, nearly unchanged for the day, and seem vulnerable to prolong the recent downfall witnessed over the past three weeks or so. 

US President Donald Trump's fresh tariffs on commodity imports drive some haven flows and lends support to the Japanese Yen (JPY), which continues to be underpinned by hawkish Bank of Japan (BoJ) expectations. In fact, several BoJ officials recently backed the case for more rate hikes amid worries that the broadening inflation is weighing on consumer spending. This marks a big divergence in comparison to the Bank of England's (BoE) gloomy outlook and validates the negative outlook for the GBP/JPY cross. 

The UK central bank cut interest rates by a quarter-point last week, and some policymakers wanted a bigger move to offset a slowdown. Moreover, the BoE lowered its 2025 growth outlook and now forecasts it to expand by 0.75% compared to the previous estimate of 1.5%. Adding to this, BoE Governor Andrew Bailey told reporters that the central bank expects to make further rate cuts this year. This might continue to undermine the British Pound (GBP) and keep a lid on any attempted recovery for the GBP/JPY cross. 

There isn't any relevant market-moving economic data due for release from the UK on Tuesday, though BoE Governor Andrew Bailey's scheduled speech might influence the GBP. Apart from this, the JPY price dynamics should contribute to producing short-term trading opportunities around the GBP/JPY cross. Nevertheless, the aforementioned fundamental backdrop seems tilted in favor of bearish traders and suggests that the path of least resistance for spot prices remains to the downside.