GBP/JPY nears YTD highs at 199.80 as tariffs, political uncertainty hurt the Yen
|- The Pound pares losses against the Yen despite weak UK employment data.
- Political uncertainty in Japan and an extended decline in exports are weighing on the JPY.
- In the UK, Unemployment increased to its highest rate in the last four years.
The Pound has shrugged off the impact of the grim UK employment figures seen earlier today to rally against a weaker Japanese Yen, weighed by the increasing political uncertainty and lack of progress in the trade talks with the US.
The JPY is suffering on Thursday as political uncertainty grows in Japan, following a poll that suggested Prime Minister Ishiba’s ruling coalition is likely to lose its majority in parliament after Sunday’s election.
The uncertain political scenario adds to investors’ anxiety about the lack of advances in the trade negotiations with the US, as the country’s exports decline for the second consecutive month. These figures pose a significant challenge for an economy strongly dependent on international trade.
The Japanese Yen’s weakness has offset the impact of the downbeat UK employment figures seen earlier today. Data from national Statistics revealed that the Unemployment Rate increased to 4.7% in June, against expectations. Claims for unemployment benefits declined to 25.9K, from last month’s 33.1K, but failed to meet the market consensus of a larger decline, to 17.9K.
Economic Indicator
ILO Unemployment Rate (3M)
The ILO Unemployment Rate released by the UK Office for National Statistics is the number of unemployed workers divided by the total civilian labor force. It is a leading indicator for the UK Economy. If the rate goes up, it indicates a lack of expansion within the UK labor market. As a result, a rise leads to a weakening of the UK economy. Generally, a decrease of the figure is seen as bullish for the Pound Sterling (GBP), while an increase is seen as bearish.
Read more.Last release: Thu Jul 17, 2025 06:00
Frequency: Monthly
Actual: 4.7%
Consensus: 4.6%
Previous: 4.6%
Source: Office for National Statistics
The Unemployment Rate is the broadest indicator of Britain’s labor market. The figure is highlighted by the broad media, beyond the financial sector, giving the publication a more significant impact despite its late publication. It is released around six weeks after the month ends. While the Bank of England is tasked with maintaining price stability, there is a substantial inverse correlation between unemployment and inflation. A higher than expected figure tends to be GBP-bearish.
Economic Indicator
Claimant Count Change
The Claimant Count Change released by the UK Office for National Statistics presents the change in the number of unemployed people in the UK claiming benefits. There is a tendency for the metric to influence GBP volatility. Usually, a rise in the indicator has negative implications for consumer spending and economic growth. Generally, a high reading is seen as bearish for the Pound Sterling (GBP), while a low reading is seen as bullish.
Read more.Last release: Thu Jul 17, 2025 06:00
Frequency: Monthly
Actual: 25.9K
Consensus: 17.9K
Previous: 33.1K
Source: Office for National Statistics
The change in the number of those claiming jobless benefits is an early gauge of the UK’s labor market. The figures are released for the previous month, contrary to the Unemployment Rate, which is for the prior one. This release is scheduled around the middle of the month. An increase in applications is a sign of a worsening economic situation and implies looser monetary policy, while a decrease indicates improving conditions. A higher-than-expected outcome tends to be GBP-bearish.
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.