The British pound consolidated its gains against the Japanese yen this morning, supported by the Japanese currency’s stability around 145 levels, approaching its lowest level since June 30, due to weak liquidity as Japan spends a holiday today, in addition to British economic growth data that showed expansion.
UK data this morning:
In the early hours of this morning, data on British gross domestic product was released, recording a growth of 0.2% on a quarterly basis in the second quarter of 2023, after a growth of 0.1% in the first quarter, exceeding expectations for a flat reading, shrinking the trade deficit in the United Kingdom to 4.79 billion. pounds in June 2023 from £7.66 billion, upwardly revised in the previous month. Exports were flat month-on-month at £66.4 billion while imports fell 3.9% to £71.1 billion. UK construction production expanded by 4.6% on an annual basis in June 2023, beating market expectations of a 1.9% rise. This was the fastest growth in construction activity since February, as well as industrial production advanced 1.8% m/m in June 2023, recovering from a 0.6% decline in the previous month and well above market expectations of a 0.1% rise. This was the strongest growth in industrial activity since August 2020
Looking at Japan’s data during the week:
The data showed that producer prices in the country rose more than two years ago and slowed for the seventh consecutive month in July this year. The Bank of Japan also kept its short-term interest rate target at -0.1% during its previous meeting in July but eased yield curve control. Kazuo Ueda also insisted that the policy adjustment was not a step toward policy normalization.
Technically, the GBP-JPY pair is hovering around 183.95 yen, basing its momentum on the 20 and 50-day moving averages, coinciding with the support levels around 182.100 yen, in addition to the renewal of the purchasing power on the momentum indicators for a period of 4 hours, so the pair is likely to head To receive a new impetus from the 50-day moving average around 182.100, then build up again, targeting resistance levels around 183.95 and 185.50 yen.
