GBP/JPY recovers from a weekly low, holds above 181.00 amid the FX intervention fears
|- GBP/JPY holds above the 181.00 mark on Friday.
- The downbeat UK economic data added to the country's dismal economic outlook.
- Japanese Labor Cash Earnings for August rose by 1.1% YoY vs. 1.3% prior, below than expected.
The GBP/JPY cross holds positive ground for the third consecutive day after bouncing off the weekly low of 178.08 during the Asian session on Friday. The speculation that Japanese authorities will intervene in the currency remains in traders’s focus in the quiet day of top-tier data released from both Japan and the UK. The cross currently trades near 181.09, up 0.02% on the day.
On Thursday, the downbeat UK S&P Global Construction PMI added to the country's dismal economic outlook, coming in at 45.0 in September from 50.8 in the previous reading, below the market expectation of 49.9. Earlier this week, both the UK’s S&P Global/CIPS Composite PMI and Services PMI for September came in above the market consensus but remained below 50 in contraction territory. This, in turn, weighs on the British Pound (GBP) against the Japanese Yen (JPY)
On the JPY’s front, Japanese Finance Minister Shunichi Suzuki again declined on Thursday to comment on whether Japan intervened in the FX market. Suzuki noted that there are various factors to consider when determining if currency fluctuations are excessive, and there would be no change in how the government handles them. That said, the potential intervention by the Japanese authorities to support JPY might act as a headwind for the GBP/JPY cross.
Earlier Friday, the latest data revealed that Japanese Labor Cash Earnings for August rose by 1.1% YoY versus 1.3% prior, below the estimation of 1.5%. Meanwhile, the nation’s Household Spending dropped 2.5% YoY from a 5% fall in the previous reading, better than the expectation of a 4.3% decline.
Moving on, the Japanese preliminary Coincident Index and Leading Economic Index for August will be released. Also, the UK Halifax House Prices for September will be due later on Friday.
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