GBP/JPY Falls Below 198.50 After Weak UK Retail Sales Data
The GBP/JPY currency pair dropped below 198.50 on Friday, continuing to fall for the second day in a row. This happened because UK retail sales for June came in weaker than expected. Retail sales grew by only 0.9%, missing the forecast of 1.2%. This follows a big drop of 2.8% in May. Core retail sales, which exclude fuel, also rose less than expected at 0.6%. On a yearly basis, retail sales rose by 1.7%, still below market hopes.
Consumer confidence in the UK also weakened, falling to -19 in July from -18 in June. People are worried about higher taxes and inflation, which is affecting spending.
Meanwhile, the Japanese yen was influenced by inflation data from Tokyo. The Consumer Price Index (CPI) increased by 2.9% in July compared to last year, a slight drop from June’s 3.1%. This shows that inflation in Japan remains steady but moderate.
Because of the weak UK retail sales and steady inflation in Japan, the British pound weakened against the yen. As a result, GBP/JPY traded around 198.30 in Asian markets.
Impact:
The GBP/JPY forecast suggests the pair could keep falling if UK retail sales stay weak and consumer confidence remains low. Traders will watch inflation data and forex market reactions closely.