Market news
14.07.2023, 10:39

GBP/JPY approaches 182.00 as UK Inflation comes under spotlight

  • GBP/JPY is aiming to recapture 182.00 as investors are shifting their focus on the UK inflation data.
  • Catalysts that have been propelling severe inflation in the UK economy are labor shortages and significantly higher food inflation.
  • The BoJ might continue its decade-long ultra-dovish interest rate policy this month to elevate wage pressures further.

The GBP/JPY pair is marching towards the crucial resistance of 182.00 in the European session. The cross has picked strength after overstepping the previous day’s high of 181.45 as expectations of a tweak in the Bank of Japan’s (BoJ) ultra-dovish monetary policy by BoJ Governor Kazuo Ueda have lost their impact.

The contribution of higher domestic demand to inflationary pressures in Japan is increasing but is still far from the impact of higher prices of imported products. Wages have shown little promising signs of recovery but the journey towards a 2% stable inflation target is still far. The BoJ might continue its decade-long ultra-dovish interest rate policy this month to elevate wage pressures further.

Meanwhile, the Pound Sterling has hogged the limelight as investors are assured that more interest rate hikes by the Bank of England are in the pipeline so that inflation could return to 2%. After bleak employment reports, stable wage pressures, and weak factory activities, investors are shifting their focus toward inflation data, which will release on Wednesday at 06.00 GMT.

In May, annual headline inflation rebounded to 8.7% and core CPI that excludes volatile oil and food prices printed a fresh high of 7.1%. Catalysts that have been propelling severe inflation in the UK economy are labor shortages and significantly higher food inflation. For labor shortages, the entire blame goes to the Brexit event and early retirements by UK individuals.  While food price inflation in the Britain economy dropped to 18.3% in May from its 45-year high of 19.1 and has not peaked yet.

 

© 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