- GBP/JPY trades lower due to Japan’s moderate inflation data.
- Better-than-expected Export figures could provide support to JPY.
- China's economic downturn woes could impact the Japanese Yen.
GBP/JPY trades lower around 185.60 during the Asian session on Friday, extending losses for the second consecutive day. The Japanese Yen (JPY) gets support from Japan’s moderate inflation data released early in the day. That said, National Consumer Price Index (YoY) remained consistent at the rate of 3.3%, better than the expected 2.5% in July. The annual National CPI ex Food, Energy improved to the reading of 4.3% from 4.2% in the previous month. While National CPI ex-Fresh Food reduced to figure 3.1% as expected, which was 3.3% prior.
Furthermore, the moderate trade data released from Japan on Thursday served as a supporting factor for JPY, potentially capping the gains of the GBP/JPY pair. The better-than-expected annual Export figure could offer some support to the JPY. It's worth noting that this figure actually declined compared to the previous reading, marking the first such decline in almost two and a half years.
The fall in Japan's export figure could be attributed to concerns over a global recession, particularly as China's demand weakens. China is a major trading partner for Japan, and a decrease in its demand for goods can ripple through global trade networks and affect the economy as it heavily relies on exports.
On the other hand, the market participants seek further clues on the upward strength in GBP/JPY pair as it has already shown strength, primarily driven by the improved earnings and inflation figures released during the week.
These resilient economic data could amplify the concerns over interest rate hikes by the Bank of England (BoE) in the September meeting. The market participants will closely watch the upcoming release of United Kingdom (UK) Retail Sales (MoM) later in the day. In July, consumer spending is expected to reduce to the reading of -0.5% from the 0.7% figure in the previous month.
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.