- GBP/JPY loses ground to around 195.65 in Tuesday’s early European session.
- UK Unemployment Rate rose to 4.6% in three months to April; Claimant Count Change came in at 33.1K in May.
- Hawkish BoJ expectations support the Japanese Yen and act as a headwind for the cross.
The GBP/JPY cross weakens to near 195.65 during the early European session on Tuesday. The Pound Sterling (GBP) remains weak against the Japanese Yen (JPY) after the UK employment data. Traders will keep an eye on the monthly UK Gross Domestic Product (GDP) data for April, which is due on Thursday.
Data released by the UK Office for National Statistics on Tuesday showed that the country’s ILO Unemployment Rate ticked higher to 4.6% in the three months to April versus 4.5% prior. This figure came in line with the expectations of 4.6% during the reported period.
Meanwhile, the Claimant Count Change increased by 33.1K in May versus -21.2K prior (revised from 5.2K), below the consensus of 9.5K. The GBP attracts some sellers in an immediate reaction to the weaker UK employment report.
Japan’s GDP shrank at an annual rate of 0.2% in Q1, compared to the initial estimate of a 0.7% fall, Japan’s Cabinet Office showed on Monday. An upward revision of Japan’s Q1 GDP has reaffirmed the Bank of Japan (BoJ) rate hike bets and could underpin the JPY.
BoJ Governor Kazuo Ueda said on Tuesday that the central bank will raise interest rates if it has enough confidence that the underlying inflation is near or moves around 2%. The Japanese central bank is set to hold a two-day policy meeting next week.
