GBP/JPY remains steady around 200.10 in early European trading on Tuesday. UK Unemployment Rate increased to 4.4% in the three months to April, with Claimant Count Change at 50.4K in May. Analysts predict that the Bank of Japan (BoJ) may start reducing its monthly bond purchases at Friday’s policy meeting.
The GBP/JPY pair is trading positively for the third day in a row, despite a slight drop due to mixed UK employment data. The focus now shifts to the upcoming BoJ meeting. Recent data from the UK Office for National Statistics revealed a rise in the ILO Unemployment Rate to 4.4% in April, higher than expected. Additionally, jobless claims increased by 50.4K in May. On the brighter side, UK Average Earnings showed growth, with the Pound Sterling facing some selling pressure in response to the data.
Looking ahead, the BoJ is likely to taper its bond purchases, as indicated by a Reuters poll of economists. The central bank is expected to maintain its short-term interest rate at 0.0%–0.1%. A dovish tone from the BoJ could weaken the Japanese Yen and support the GBP/JPY pair. Investors will closely monitor the BoJ’s statement for further insights.