Pound Sterling Weakened as UK Economy Exceeds Expectations

The British Pound (GBP) has depreciated against the Japanese Yen (JPY) following the release of key economic data from the United Kingdom. According to the UK Office for National Statistics (ONS), the country's Gross Domestic Product (GDP) grew by 0.4% month-over-month in July, surpassing market expectations of a flat 0% growth.

The strong GDP figures were accompanied by positive momentum in broader economic output data, with monthly Industrial Production rising by 0.2% and Manufacturing Production increasing by 0.9% over the same period.

Meanwhile, the Japanese Yen has continued to draw support from growing expectations of more aggressive policy tightening by the Bank of Japan (BoJ), alongside the ongoing unwinding of carry trades and increased capital repatriation.

Economists at ING expect the BoJ to press ahead with further policy normalization this week, forecasting that the bank will raise its policy rate by 25bp to 1.25% on Friday amid persistent price pressures.