GBP/JPY Stays Weak Near 195.00 as Investors Avoid Risks
The British pound is still weak against the Japanese yen, staying near the 195.00 level on Friday. This drop is because investors are avoiding risky trades after Israel’s attacks on Iran increased tensions in the Middle East. Many people are now moving their money to safer places, which helps the yen stay strong.
Adding to the pound’s problems, new UK data showed the economy got smaller by 0.3% in April, which was worse than what experts expected. Also, factory and industrial output were weaker than predicted. Because of this, traders think the Bank of England might cut interest rates sooner to help the economy grow.
On the other side, the Japanese yen is gaining support as investors see it as a safe currency during uncertain times. Also, the Bank of Japan is expected to keep its very low interest rate steady at its next meeting, which makes the yen stable.
At the moment, the GBP/JPY pair is staying close to the lowest levels it reached last week. If tensions remain high and UK data stays weak, the pair might drop even more.
Impact: This news may keep pushing the pound down and make traders stay careful until tensions ease.