GBP/JPY remains steady above 203.00 despite UK GDP disappointment

The Pound remains moderately bid against the Japanese Yen on Thursday, and holds previous days’ gains at levels near two-week highs at the 203.50 area, unfazed by a raft of weaker-than-expected UK economic figures released earlier on the day.

UK economy slowed down beyond expectations in the third quarter, according to preliminary Gross Domestic Product (GDP) figures released earlier on the day. The quarterly GDP grew at a 0.1% pace, down from 0.3% in the previous quarter and also below the 0.2% anticipated by market analysts. Year-on-year, the economy expanded 1.3%, also below expectations of a steady 1.4% growth.

Apart from that, Manufacturing production contracted at a 1.7% pace, well beyond the market expectations of a 0.3% drop, and following a downwardly revised 0.6% increase in August. Likewise, Industrial Production dropped 2.0% from the previous month, against expectations of a 0.2% decline and following a 0.3% increase in the previous month.

These figures add to evidence of a significant economic slowdown in the UK, which is likely to force the Bank of England to cut interest rates further in December. The Pound, however, has remained fairly steady against its main peers following the release.

The Yen is failing to capitalise on UK data, weighed down by weaknesses of its own. News reporting pressures from Prime Minister Sanae Takaichi to the Bank of Japan to keep interest rates at low levels have curbed hopes of a rate cut in December, adding pressure on an already weak Japanese Yen.

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