- GBP/JPY weakened as the UK Retail Sales reported an unexpected 0.3% MoM decline in December.
- The Pound Sterling faced challenges as UK GDP fell short of the anticipated growth in November.
- Japan’s Kato voiced his expectation that the BoJ will manage monetary policy effectively to achieve the 2% inflation target.
GBP/JPY extends its losses for the third successive day, trading around 189.60 during the early European hours on Friday. The GBP/JPY cross loses ground as the Pound Sterling (GBP) depreciates following disappointing Retail Sales data from the United Kingdom (UK).
UK Retail Sales unexpectedly fell by 0.3% month-on-month in December, following a 0.1% increase in November, with markets anticipating a 0.4% rise. Core Retail Sales, excluding auto fuel, declined by 0.6% MoM, contrasting with the previous growth of 0.1% and the expected 0.1% increase. On an annual basis, UK Retail Sales rose 3.6% in December compared to 0% in November, while core Retail Sales increased by 2.9%, up from the previous decline of 0.5%. Both figures missed market expectations.
However, the British Pound faced selling pressure amid rising expectations of lower interest rates in the United Kingdom (UK), where economic data showed mixed signals. British GDP grew by 0.1% month-over-month (MoM) in November 2024, rebounding from contractions of 0.1% in both October and September. However, this growth fell short of the anticipated 0.2% increase.
The upside of the GBP/JPY cross could be restrained as the Japanese Yen may find support amid growing expectations that the Bank of Japan (BoJ) will hike interest rates next week. These speculations have driven yields on Japanese Government Bonds (JGBs) to multi-year highs.
Japan’s Finance Minister Katsunobu Kato reiterated on Friday that monetary policy decisions are the responsibility of the Bank of Japan (BoJ). He also expressed his expectation that the BoJ will conduct monetary policy effectively to meet the 2% inflation target.
Bloomberg reported on Thursday, citing unnamed sources, that the BoJ is likely to raise interest rates next week unless a significant market disruption occurs following the inauguration of US President-elect Donald Trump.
Economic Indicator
Retail Price Index (MoM)
Retail Price Index released by the National Statistics is a statistical measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is widely considered as a key measure of inflation that indicates an accurate reflection of the cost of living. Normally, a high reading is seen as positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).
Read more.Last release: Wed Jan 15, 2025 07:00
Frequency: Monthly
Actual: 0.3%
Consensus: 0.7%
Previous: 0.1%
Source: Office for National Statistics
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.