Stronger-than-expected UK retail sales data bolster the British Pound, offsetting recent losses against the Japanese Yen.
The GBP/JPY cross stabilized around 218.20 in early European trading on Friday, recovering from six consecutive days of declines. The British Pound found support after UK Retail Sales rose 1.0% month-over-month in June, defying expectations of a 0.3% contraction. Annual sales grew 4.2%, surpassing the 2.3% forecast and May’s 3.5% increase.
Core Retail Sales, excluding autos and fuel, climbed 1.1% MoM and 5.4% YoY, both exceeding consensus estimates. Meanwhile, the Japanese Yen remained under pressure due to domestic fiscal concerns and rising energy costs linked to US-Iran tensions, limiting its recovery.
Market reaction was muted, with traders largely ignoring warnings of potential Japanese government intervention in forex markets. Bank of Japan officials’ hints at faster rate hikes also failed to lift the Yen significantly.