British Pound steadies against Japanese Yen following outperformance in UK Retail Sales

UK Retail Sales surged 1.0% in June, easily beating forecasts of a 0.3% decline.
Core Retail Sales jumped 5.4% year-over-year, demonstrating resilient consumer spending despite economic pressure.
Broader Sterling strength helped the GBP/JPY cross hold ground amid ongoing Japanese Yen weakness.

Akhtar Faruqui FXStreet

GBP/JPY remains calm after six days of losses, trading around 218.20 during the early European hours on Friday. The currency cross holds its ground as the British Pound (GBP) receives support from the release of stronger-than-expected UK Retail Sales data.

According to the UK Office for National Statistics (ONS), Retail Sales climbed 1.0% month-over-month in June following a 1.2% rise in May, handily beating market forecasts of a 0.3% decline. On an annual basis, June Retail Sales grew by 4.2%, outperforming both May's revised 3.5% increase and the expected 2.3%. Core Retail Sales—which exclude volatile auto and motor fuel—also showed robust growth, rising 1.1% MoM against an anticipated 0.4% contraction, while annual core sales surged 5.4% versus the 3.2% consensus estimate.

Meanwhile, the Japanese Yen (JPY) continues to struggle, giving the GBP/JPY cross further room to stabilize. Verbal warnings of potential government intervention have failed to stem the Yen's decline, as traders largely brushed off remarks from Japan’s Finance Minister regarding decisive action in the forex market.

Even with Bank of Japan officials remaining open to faster rate hikes than currently priced in, domestic fiscal concerns surrounding Prime Minister Sanae Takaichi's policies continue to weigh on the Japanese Yen. Furthermore, escalating US-Iran tensions have raised fears for Japan's energy-dependent economy, leaving the Yen increasingly vulnerable to rising fuel costs.

Economic Indicator

Retail Sales (YoY)

The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

GBP/USD defends 1.3300 after strong UK Retail Sales data

GBP/USD is defending its renewed uptick above 1.3300 in the European session on Friday, helped by stronger-than-expected UK Retail Sales data for June. The pair snaps a five-day losing streak but the upside potential could be limited amid heightened military tensions in the Middle East.

EUR/USD rises to 1.1400 after strong German PMI data

EUR/USD is catching a fresh bid and retakes 1.1400 in European trading on Friday. The pair gains ground after Germany's preliminary HCOB Manufacturing PMI beat estimates with 52.2 in July, lifting the Euro. However, further upside could be limited by escalating conflicts in the Middle East, despite the ECB's hawkish hold decision.

Gold sticks to intraday losses below $4,050 amid Fed hike bets, bullish USD

Gold remains under some selling pressure for the second straight day, and weakens further below the $4,050 level during the Asian session. Escalating US-Iran tensions support elevated crude oil prices, fueling inflation fears and bolstering expectations of higher-for-longer US interest rates. This helps the US Dollar preserve its strong weekly gains to a nearly one-month high, touched on Thursday, and turns out to be a key factor undermining the non-yielding bullion.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

Crypto Market Overview: Bitcoin tests 50-day EMA support – Pi Network and Sky lead losses

The broader cryptocurrency market faces headwinds with rising tensions between the US and Iran, pushing Bitcoin down to its 50-day Exponential Moving Average support around $65,135 on Friday. Under pressure, Pi Network and Sky emerge as the worst-performing crypto assets over the last 24 hours.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.