GBP Sells Off Against JPY as UK Employment Data Disappoints

The British Pound (GBP) took a hit against the Japanese Yen (JPY) after the release of UK labor market data for three months ending in June. The Office for National Statistics (ONS) reported that the economy created 83,000 fresh jobs, lower than the previous quarter's 147,000. However, Average Earnings Excluding Bonuses rose at a faster pace of 3.5% Year-on-Year (YoY), beating estimates and the prior release.

The ILO Unemployment Rate remained steady at 4.9%, as expected to be lower at 4.8%. Meanwhile, investors are bracing for more volatility in the British Pound this week with the UK Consumer Price Index (CPI) data scheduled to be published on Wednesday. The data is expected to show that headline inflation accelerated to 2.9% Year-on-Year from 2.6% in June.

Market expectations suggest that the Bank of England (BoE) will likely keep interest rates steady through year-end, with strategists at Rabobank noting that 'it is RaboResearch's view that the BoE will likely keep interest rates on hold through to the end of the year.'