GBP/JPY Dives as Strong UK GDP Fails to Lift Sterling Amid BoJ Tightening Bets
The GBP/JPY currency pair has declined to around 208.30 in Asian trading on Friday, following a previous day's advance, as the Sterling remains subdued despite stronger-than-expected UK economic data.
The Office for National Statistics reported that GDP rose 0.4% month-over-month in July, surpassing expectations of no growth and building on June's 0.3% increase. Additionally, Industrial Production increased by 0.2%, while Manufacturing Production climbed 0.9%.
However, the Yen has gained support due to expectations of further Bank of Japan tightening, with carry trades unwinding and capital being repatriated. This has led to a decrease in risk appetite, despite higher oil prices linked to ongoing US-Iran conflict keeping inflation risks elevated.