The British pound slipped against the Japanese yen on Tuesday, with the GBP/JPY pair falling to around 195.65 during early European trading. The decline follows the release of weaker-than-expected UK employment data, prompting renewed pressure on the pound ahead of Thursday’s GDP figures for April.
According to the UK Office for National Statistics, the country’s ILO Unemployment Rate edged up to 4.6% in the three months to April, in line with forecasts but slightly higher than the previous reading of 4.5%.
More concerning was the Claimant Count Change, which surged by 33,100 in May, a sharp reversal from the revised decline of 21,200 in April. The reading fell well short of market expectations for a 9,500 increase, further weighing on investor sentiment toward the pound.
In contrast, the Japanese yen found support after an upward revision to Japan’s first-quarter GDP. The economy contracted at an annualized rate of just 0.2%, significantly better than the preliminary estimate of a 0.7% decline, according to figures released Monday by Japan’s Cabinet Office.
The revised data has bolstered expectations that the Bank of Japan (BoJ) may consider tightening monetary policy. On Tuesday, BoJ Governor Kazuo Ueda reinforced this view, stating the central bank would raise interest rates if it is sufficiently confident that underlying inflation is near the 2% target. The BoJ is scheduled to hold its next policy meeting over two days next week.
Market participants will closely monitor upcoming UK GDP data, which could provide further direction for the GBP/JPY pair.
