With the U.S. Federal Reserve calling for near zero interest rates through mid 2013, that leaves the U.S. dollar on the bearish side of an interest rate differential play.
In recent years the U.S. has improved relative to Japan in terms of productivity and the terms of trade, and the interest-rate differential has widened in America's favor.
If investors see British and American bonds as perfect substitutes, then the expected movements of their currencies against one another should equalise the differential between their interest rates.