British Pound attracts bids against Japanese Yen after UK Q2 GDP data

The British Pound gains slightly against the Japanese Yen after the UK Q2 GDP data release.
UK GDP growth remained in line with estimates at 0.4% in the second quarter this year.
Investors seek fresh cues regarding more US-Japan intervention to support the Yen.

Sagar Dua FXStreet

The British Pound (GBP) attracts slight bids against the Japanese Yen (JPY) during the European trading session on Wednesday, following the release of the preliminary United Kingdom (UK) Q2 Gross Domestic Product (GDP) data.

The Office for National Statistics (ONS) has reported that the economy expanded at a 0.4% pace, as expected, slower than the 0.6% growth seen in the first quarter this year. On an annualized basis, the GDP growth also remained higher at 1.2% than the 1.1% estimates and the previous reading of 0.9%. In June, GDP growth was 0.3%, while it was expected to remain flat again.

Meanwhile, monthly Manufacturing and Industrial Production data also remained stronger than expectations. Manufacturing Production rose by 0.5%, while it was expected to decline by 0.2%. Industrial Production grew 0.2%, faster than 0.1% estimates.

Going forward, the British currency will be influenced by market expectations for the Bank of England’s (BoE) monetary policy outlook.

On the Tokyo front, the Japanese Yen trades broadly sideways as investors seek fresh cues from Japan’s Ministry of Finance (MoF) on whether there will be more United States (US)-Japan joint intervention to support the currency.

The US-Japan jointly intervened on the last day of July to counter “excessive volatility and disorderly movements in the Japanese yen in recent months", Japan MoF reported.

(This story was corrected in several places to say that UK GDP grew in line with estimates of 0.4%, and not steadily by 0.6%)

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

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