GBP/JPY remains flat after an eight-day winning streak, trading around 215.60 during the early European hours on Thursday. The currency cross remains close to an all-time high of 215.91, reached on April 15, following the release of the United Kingdom’s (UK) Gross Domestic Product (GDP) data.
The Office for National Statistics (ONS) showed on Thursday that UK GDP grew 0.5% month-over-month (MoM) in February, following a 0% reported in January. The market forecast was for a 0.1% rise in the same period.
Meanwhile, the UK Index of Services for February increased by 0.5% on a three-month-on-three-month basis, up from 0.2% in January. Monthly Industrial Production rose by 0.5% in February, whereas Manufacturing Production fell by 0.1% over the same period.
The upside of the GBP/JPY cross is restricted as the Japanese Yen (JPY) strengthens on growing speculation that Japanese authorities may intervene to curb weakness in the domestic currency.
Japanese Finance Minister Satsuki Katayama said she held detailed discussions on foreign exchange policy with US Treasury Secretary Scott Bessent, adding that authorities stand ready to act decisively if required.
The International Monetary Fund (IMF) noted that the Bank of Japan (BoJ) could look through inflation stemming from the Iran conflict, as its impact on underlying price pressures is expected to remain limited and unlikely to derail the central bank’s gradual tightening path.
Economic Indicator
Gross Domestic Product (MoM)
The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
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