-
GBP/JPY slips to around 195.65 in early European trading on Tuesday.
-
UK Unemployment Rate climbed to 4.6% in the three months to April, while May’s Claimant Count Change increased by 33.1K.
-
Rising expectations of a hawkish Bank of Japan continue to support the Yen, pressuring the currency pair.
The GBP/JPY pair declined to around 195.65 in early European trading on Tuesday as the Pound Sterling (GBP) came under pressure following the release of disappointing UK employment figures. Investors now turn their attention to the upcoming UK Gross Domestic Product (GDP) data for April, due on Thursday.
According to the UK Office for National Statistics, the ILO Unemployment Rate rose to 4.6% in the three months to April, up from 4.5%, aligning with market expectations. Meanwhile, the Claimant Count Change jumped by 33.1K in May, a sharp reversal from April’s revised -21.2K, and well above the consensus forecast of 9.5K. The weaker labor market data triggered fresh selling in the GBP.
On the other hand, the Japanese Yen (JPY) found support after Japan’s Cabinet Office revised its Q1 GDP contraction to an annualized 0.2%, an improvement from the initial estimate of a 0.7% decline. The upward revision has reinforced expectations for a potential Bank of Japan (BoJ) rate hike.
BoJ Governor Kazuo Ueda further fueled speculation by stating on Tuesday that the central bank will consider raising interest rates if there is sufficient confidence that core inflation is trending around 2%. The BoJ is scheduled to hold its next two-day monetary policy meeting next week.
