GBP Falls Against JPY Amid Slower Job Growth and Upcoming Inflation Data

The British Pound (GBP) fell against the Japanese Yen (JPY) after the release of UK labor market data for the three months ending in June. The Office for National Statistics reported that the economy created 83K fresh jobs, lower than the previous quarter's 147K. The ILO Unemployment Rate remained steady at 4.9%, as expected.

However, Average Earnings Excluding Bonuses rose at a faster pace of 3.5% YoY compared to estimates and the prior release of 3.4%. This may indicate a possible increase in wage growth, but it's tempered by the slower-than-expected growth rate including bonuses at 4.1%, matching projections.

Investors are bracing for more volatility in the British Pound this week as the UK Consumer Price Index (CPI) data is scheduled to be published on Wednesday. The inflation data is expected to show that headline inflation accelerated to 2.9% Year-on-Year from 2.6% in June.

Strategists at Rabobank underline a steady policy outlook, noting that 'it is RaboResearch's view that the BoE will likely keep interest rates on hold through to the end of the year.' This suggests that the Bank of England may not raise interest rates despite the expected inflation increase.