During the European session on Tuesday, GBP/JPY halted its six-day winning streak, trading around 195.90. The Pound Sterling (GBP) faces challenges following the release of mixed UK employment data, exerting downward pressure on the GBP/JPY cross.
The ILO Unemployment Rate (3M) for March climbed to 4.3% from the previous reading of 4.2%, in line with market expectations. The number of unemployed individuals increased by 46,000 to reach a total of 1.49 million, primarily driven by those unemployed for up to six months. Additionally, the number of people claiming jobless benefits rose by 8.9K in April, following a decline of 2.4K in March. Meanwhile, the UK Employment Change for the three months to March stood at -177K, compared to the previous reading of -156K.
Huw Pill, Chief Economist at the Bank of England (BoE), remarked that the central bank can consider rate cuts while maintaining a restrictive policy stance. Pill expressed confidence that by summer, there may be sufficient grounds to contemplate rate adjustments, as reported by forexlive.com.
On the JPY front, former Bank of Japan (BoJ) executive Kazuo Momma indicated that the central bank is likely to postpone its next rate hike until September. Momma suggested that policymakers would prefer to wait until at least September to gather additional information from the government’s monthly wage data for July and August.
Japan’s Finance Minister, Shunichi Suzuki, emphasized the coordination between the government and the Bank of Japan to ensure alignment in policy objectives regarding foreign exchange. Suzuki underscored their commitment to implementing all feasible measures to closely monitor movements in the Japanese Yen.
