GBP/JPY delivers a V-shape recovery from below 172.30 on mixed UK Retail Sales
|- GBP/JPY has recovered sharply and has climbed to near 172.50 after the release of mixed UK Retail Sales.
- Monthly UK Retail Sales have expanded sharply, portraying resilience in the households’ demand.
- BoJ Ueda is considering options for tweaking YCC.
The GBP/JPY pair has slipped below the immediate support of 172.30 in the early European session. The cross has faced immense pressure after the release of the mixed United Kingdom Retail Sales data (April).
Monthly Retail Sales expanded by 0.5% vs. 0.3% as expected and against a contraction of 1.2% reported earlier. While annual Retail Sales missed estimates and contracted by 3.0% against the consensus of a 2.8% contraction. Monthly Retail Sales excluding volatile fuel factors have expanded by 0.5% while the street was anticipating an expansion of 0.3%.
Solid expansion in UK monthly Retail Sales indicates that households’ demand is resilient, which will keep pressure on the Bank of England (BoE). On Thursday, BoE interest rate-setter Jonathan Haskel said, if we do see evidence of more inflation persistence, we will tighten policy.
UK Finance Minister is confident that inflation will be halved by the year-end as promised by UK Prime Minister Rishi Sunak. He further added the administration wants to cut taxes to provide relief to households from stubborn inflation and for that inflation needs to bring down otherwise it could have catastrophic effects.
On the Japanese Yen front, discussions about a tweak in Yield Curve Control (YCC) by Bank of Japan (BoJ) Kazuo Ueda have put the Japanese Yen under the spotlight. BoJ Ueda cited that “Shortening the duration of bond yields it targets to the five-year zone from the current 10-year zone could be among options."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.