- GBP/JPY maintains strength despite the UK labor report released on Thursday.
- The UK’s unemployment rate increased to 4.7%, though employment rose by 134,000 in the three months leading up to May.
- Japan reported a trade surplus of 153.1 billion yen in June, in contrast to a surplus of 35.39 billion yen previously.
GBP/JPY is set to recover from losses noted in the last session, trading near 199.00 during early European hours on Thursday. The mixed employment figures from the UK haven’t seemed to affect the currency pair’s resilience.
The latest ILO unemployment data from the UK showed an uptick to 4.7% for the three months prior to May. On the other hand, employment figures improved, showing an increase of 134,000 compared to April’s 89,000. However, there was a rise in unemployment benefit claims, with an additional 25.9k individuals applying in June.
Support for the GBP/JPY pair is gaining momentum as the Japanese yen (JPY) faces challenges following disappointing trade statistics. This situation has sparked worries about a potential technical recession. Investors are also keeping an eye on the possibility of fiscal measures ahead of the Senate elections on July 20, with discussions around increased government spending and a possible cut in consumption tax to boost economic activity.
Japan’s goods trade balance reported a surplus of 153.1 billion yen for June, well below the market’s expectations of 63.866 billion yen as it dropped from May’s impressive 353.9 billion yen surplus. Exports fell by 0.5% year-on-year, a sharper decline compared to the previous month’s 1.7% drop. This reading didn’t meet the anticipated 0.5% growth and marked the second consecutive monthly decline. Meanwhile, imports rebounded, rising by 0.2% after a steep 7.7% fall previously, outperforming the expected 1.6% drop.
This report was updated to reflect the time as 8:00 GMT on July 17, specifically noting the employment increase of 134,000 rather than changes in employment rates.
