The GBPJPY exchange rate has consumer price data in focus for the UK economy on Wednesday.
GBPJPY – Daily Chart
The price of GBPJPY looked to be heading for a test of lower levels, but was able to bounce back into the uptrend. The upcoming data could test traders’ appetite for the British currency.
The UK’s CPI consumer price inflation data is released at 3pm HKT on Wednesday. Analysts are expecting a drop in the monthly figure to 0.1%, but a rise in the annual figure from 3.3% to 3.6%.
News from the country showed that cigarette and fuel prices appear to be moving higher again. The overall inflation level swung back above the Bank of England’s 2% target in October, largely because of household energy bills after the price cap rose. Higher inflation adds fuel to the British pound as traders expect slower interest rate cuts from the Bank of England. Food prices are also forecast to have edged higher ahead of the festive season.
The OPEC+ alliance is looking at postponing planned production increases next year amid weak demand and competing production from non-allied countries that could keep oil prices stagnant through 2025
Sanjay Raja, senior economist at Deutsche Bank, warned of “pressure building” in early 2025 due to business taxes rising and a higher minimum wage.
He said: “Looking ahead, we continue to see more upward pressure building – particularly within the services basket as the rise in employer national insurance contributions (NICs), the change in employer NICs threshold, and hikes to the national living wage all start to push prices higher around the start of 2025”.
Japan’s economy grew at a faster pace recently, indicating more strength in the recovery. Gross domestic product grew at an annualized pace of 1.2% in the three months through September, higher than the 0.9% analysts expected. The focus is now on the timing of a rate increase from the Bank of Japan.
Continued stimulus from Japan may help to boost the Japanese economy and the yen can still find strength again.
