- GBP/JPY moves higher to near 189.00 on the back of upbeat UK labor market data for three months ending February
- The escalating US-China trade war has dampened the global economic outlook.
- Japan’s Ryosei Akazawa is scheduled to visit the US for trade talks.
The GBP/JPY pair rises to near 189.00 in Tuesday’s European session. The pair moves higher as the Pound Sterling (GBP) strengthens after the release of the upbeat United Kingdom (UK) employment data for three months ending February.
The UK Office for National Statistics (ONS) reported that employers hired 206K job-seekers, significantly higher than 144K addition seen in quarter ending January. The ILO Unemployment Rate remained steady at 4.4%, as expected.
Average Earnings Excluding Bonuses, a key measure of wage growth, rose by 5.9%, missing estimates of 6%. In three months ending January, the wage growth measure rose by 5.8%. Theoretically, sticky wage growth and robust employment growth block the way for the Bank of England (BoE) to back monetary policy easing. However, financial market participants are worried about the UK economic and labor market outlook.
The intensifying tariff war between the United States (US) and China is expected to impact global economic growth, assuming that the latter will look for other markets to sell their products.
Meanwhile, an increment in employers’ contributions to National Insurance (NI) from 13.8% to 15%, as announced by Chancellor of the Exchequer Rachel Reeves in the Autumn Budget, has become effective this month. This could force employers to cut down their talent requirements to offset the impact of higher payment towards social security schemes.
In the Asia-Pacific region, investors await trade talks between Washington and Japan, with Japanese Economic Minister Ryosei Akazawa scheduled to visit the US. Ahead of the visit, Akazawa said on Monday, “Our goal is the complete removal of additional US tariffs.” He warned that Trump’s tariffs are already eating away at Japanese firms’ profits day by day.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
BRANDED CONTENT
Finding the right broker for your trading strategy is essential, especially when specific features make all the difference. Explore our selection of top brokers, each offering unique advantages to match your needs.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.1400 after Germany and EU PMI data
EUR/USD struggles to hold its ground and trades below 1.1400 in the European session on Wednesday. PMI data from Germany and the Eurozone showed that the business activity in the service sector contracted in April. Markets await comments from central bankers and US PMI data.
GBP/USD stays weak near 1.3300 after disappointing UK data
GBP/USD stays under bearish pressure near 1.3300 in the European session on Wednesday. Pound Sterling struggles to find demand following the weaker-than-forecast April PMI data from the UK. BoE Governor Bailey will speak later in the day and the US economic calendar will feature PMI reports.
Gold price touches fresh weekly low, below $3,300 amid easing US-China trade tensions
Gold price extends its steady intraday descent through the first half of the European session and momentarily slips below the $3,300 mark in the last hour as the upbeat market mood conditions undermine demand for safe-haven assets.
Dogecoin lead double-digit gains across meme coins, with Shiba Inu, PEPE and BONK skyrocketing to new monthly highs
Top meme coins Dogecoin, Shiba Inu, PEPE and BONK lead the meme coin sector with double-digit gains on Wednesday following the crypto market recovery.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.