GBP/JPY steady near 194.50 amid weak UK data and BoJ speculation
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PThe GB/JPY currency pair is holding steady near the 194.50 mark during the early European session, pressured by disappointing UK retail sales data. UK retail sales for October declined by 0.7% month-over-month, a sharper drop than the expected 0.3%, reversing the previous 0.1% increase. On a yearly basis, retail sales rose 2.4%, which was significantly below the forecasted 3.4%, signaling weaker consumer demand in the UK.
Japanese Yen Gains on BoJ Speculation
The Japanese yen (JPY) has strengthened slightly as market participants react to a Reuters survey suggesting growing expectations of a Bank of Japan (BoJ) rate hike in December. A majority of economists—56%—anticipate a rate hike in December, driven by yen depreciation and improving economic fundamentals. BoJ Governor Kazuo Ueda has underscored the importance of addressing the yen’s impact on economic and price stability, leaving the door open for further rate hikes. In addition, Prime Minister Shigeru Ishiba is reportedly considering a $90 billion stimulus package to cushion the impact of inflation on households.
Mixed Japanese Economic Data
Japan’s recent economic data paints a mixed picture. The national Consumer Price Index (CPI) eased to 2.3% year-over-year in October, marking a nine-month low. Core CPI, excluding fresh food, also dropped to 2.3%, slightly above the forecast of 2.2%. Meanwhile, PMI figures show a rebound in the Services PMI to 50.2 in November, signaling modest expansion. However, the Manufacturing PMI fell to 49.0, missing expectations of 49.5, and reaching the lowest level since March.
Focus on Upcoming PMI Data
Traders are closely watching the upcoming S&P Global UK Purchasing Managers’ Index (PMI) figures, scheduled for release later today. Expectations are for a composite PMI reading near 51.8, which would indicate continued private-sector expansion and could offer some support for the pound.
Technical Outlook: GBP/JPY Consolidates Near Support
The GBP/JPY pair is finding immediate support near the 194.00 level, with stronger downside protection around 193.00, which coincides with the lower boundary of the recent trading range. On the upside, 195.00 acts as a psychological barrier, followed by the 50-day Simple Moving Average (SMA) near 196.00. The Relative Strength Index (RSI) on the 4-hour chart is hovering near neutral levels, indicating limited directional bias in the short term.
While the yen is gaining on BoJ rate hike speculation, the pound remains under pressure from weak UK retail sales data. Today's PMI figures will be key in determining the near-term direction for the GBP/JPY pair. A break below the 194.00 support level could signal further downside risks for the pair.
Japanese Yen Gains on BoJ Speculation
The Japanese yen (JPY) has strengthened slightly as market participants react to a Reuters survey suggesting growing expectations of a Bank of Japan (BoJ) rate hike in December. A majority of economists—56%—anticipate a rate hike in December, driven by yen depreciation and improving economic fundamentals. BoJ Governor Kazuo Ueda has underscored the importance of addressing the yen’s impact on economic and price stability, leaving the door open for further rate hikes. In addition, Prime Minister Shigeru Ishiba is reportedly considering a $90 billion stimulus package to cushion the impact of inflation on households.
Mixed Japanese Economic Data
Japan’s recent economic data paints a mixed picture. The national Consumer Price Index (CPI) eased to 2.3% year-over-year in October, marking a nine-month low. Core CPI, excluding fresh food, also dropped to 2.3%, slightly above the forecast of 2.2%. Meanwhile, PMI figures show a rebound in the Services PMI to 50.2 in November, signaling modest expansion. However, the Manufacturing PMI fell to 49.0, missing expectations of 49.5, and reaching the lowest level since March.
Focus on Upcoming PMI Data
Traders are closely watching the upcoming S&P Global UK Purchasing Managers’ Index (PMI) figures, scheduled for release later today. Expectations are for a composite PMI reading near 51.8, which would indicate continued private-sector expansion and could offer some support for the pound.
Technical Outlook: GBP/JPY Consolidates Near Support
The GBP/JPY pair is finding immediate support near the 194.00 level, with stronger downside protection around 193.00, which coincides with the lower boundary of the recent trading range. On the upside, 195.00 acts as a psychological barrier, followed by the 50-day Simple Moving Average (SMA) near 196.00. The Relative Strength Index (RSI) on the 4-hour chart is hovering near neutral levels, indicating limited directional bias in the short term.
While the yen is gaining on BoJ rate hike speculation, the pound remains under pressure from weak UK retail sales data. Today's PMI figures will be key in determining the near-term direction for the GBP/JPY pair. A break below the 194.00 support level could signal further downside risks for the pair.