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Pound snaps back versus yen as investors brace for UK data
GBP/JPY rebounded to around 218.6 after falling from profit-taking near 219.61, with UK employment, CPI, and retail sales due this week.
The British pound strengthened against the Japanese yen at the start of a data-heavy week, with GBP/JPY rebounding to around 218.60 during European trading, FXStreet reports. The cross had faced selling pressure over the prior two sessions after profit-taking near multi-year highs around 219.61.
Market focus this week will be on UK economic releases that could shift expectations for the Bank of England’s next monetary policy decision. Investors are watching employment data on Tuesday, Consumer Price Index data on Wednesday, and retail sales plus preliminary Purchasing Managers’ Index data on Friday.
For the Tuesday figures, the Office for National Statistics is expected to show the ILO unemployment rate steady at 4.9%, while average earnings excluding bonuses are forecast to rise 3.4% year on year. Core UK CPI is estimated to grow 2.5% year on year versus 2.6% previously, and slower inflation pressure could support expectations for a near-term BoE rate cut.
On the yen side, the Bank of Japan is expected to leave interest rates unchanged at 1% in its policy meeting next week, according to a Kyodo report cited by FXStreet. Kyodo also said officials still see a need for back-to-back rate hikes in the near term.