Political instability and a surprise rise in UK unemployment weigh on the pound as the yen weakens broadly amid geopolitical risks.
The GBP/JPY cross fell below 213.0 on Tuesday, paring Monday’s recovery as the British pound underperformed against a softer yen. Selling pressure intensified amid deepening political uncertainty in the UK, with reports of internal party tensions and a potential leadership challenge to Prime Minister Keir Starmer.
UK unemployment rose unexpectedly to 5% in the three months to March, up from 4.9%, while April’s claimant count came in at 26.5K, slightly below the 27.3K forecast. A downward revision of March’s claimant count to 4.9K from 26.8K helped curb further losses. The yen’s weakness persisted despite better-than-expected GDP data, overshadowed by geopolitical risks tied to the Middle East conflict.
Spot prices held modest intraday losses near 213.0 during the European session, though downside remained limited by the yen’s broader decline.