GBP/JPY holds above 199.00 as UK employment data beats expectations

The Pound remains near year-to-date highs, consolidating gains, after rallying for six consecutive days. An unexpected decline in jobless claimants in July has given a fresh boost to the British Pound on Tuesday.

Data released by the UK Office for National Statistics revealed that the Unemployment rate remained steady at 4.7% in the three months to July, as expected, while net employment declined less than expected, and jobless claims also fell.

The number of requests for unemployment benefits fell by 6,200 in July, while the June initial estimate of a 25,900 increase was revised to a 15,500 decline. The market had forecasted another increase of around 20,800 in July.

Furthermore, net employment fell by 8,000, well below the 20,000 decline expected and following a 41,000 drop in June. Wages have grown at their lowest pace in almost a year, 4.6% in the three months to June, from 5% in the previous period.

These figures justify the strong opposition to cutting interest rates seen in the BoE monetary policy committee last week, and strengthen the case for steady interest rates during the rest of the year.

The Japanese Yen, on the other hand, is struggling after dovish remarks from Bank of Japan policymakers last week. The BoJ remains committed to continuing to tighten its monetary policy, but recent concerns about trade uncertainty and the impact of US tariffs are likely to deter the bank from hiking rates in the near term.

(This story was corrected on August 12 at 07:22 GMT to highlight that June's number of requests for unemployment benefits, or Claimant Count Change, was revised to a decline of 15,500.)

Office