Market news
20.06.2023, 05:02

GBP/JPY finds cushion near 181.00 as UK Inflation comes under spotlight

  • GBP/JPY has gauged a cushion around 181.00 as the focus has shifted to UK inflation.
  • Price pressures in the UK region have remained extremely stubborn in comparison with other developed economies.
  • The consistent decline in the Japanese Yen has propelled expectations of a stealth intervention by the BoJ.

The GBP/JPY pair is well-supported around 181.00 in the Asian session. The cross is getting the attention of buyers ahead of the United Kingdom Consumer Price Index (CPI) data (May), which will release on Wednesday.

Price pressures in the UK region have remained extremely stubborn in comparison with other developed economies after the pandemic. Major factors that have been fueling inflationary pressures in the Pound Sterling area are labor shortages and 45-year high food inflation.

The event of Brexit and early retirements taken by individuals have been crucial contributors to labor shortages, which forced firms to offer significantly higher payouts to offset the extreme demand for fresh talent.

As per the preliminary report, UK’s monthly headline inflation (May) is expected to show a pace of 0.4%, slower than the pace of 1.2% registered in April. Annualized headline CPI is seen softening to 8.5% vs. the prior release of 8.7% while core inflation that excludes oil and food prices is seen steady at 6.8%.

The UK inflation data will be followed by the interest rate decision from the Bank of England (BoE). Taking into account, tight Employment and stubborn inflation, BoE Governor Andrew Bailey is expected to hike interest rates further by 25 basis points (bps) to 4.75%.

On the Tokyo front, the consistent decline in the Japanese Yen has propelled expectations of a stealth intervention by the Bank of Japan (BoJ) in the FX domain. The BoJ has a history of intervening in FX operations to avoid further damage to their domestic currency.

 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location