GBP/JPY displays a sideways performance ahead of UK employment data

• GBP/JPY is hovering around 160.80 as investors await UK employment data.
• Escalating Russia-Ukraine tensions have intensified the risk-off impulse.
• A dismal UK earnings data could dampen the sentiment of UK households.

The GBP/JPY pair has turned sideways around 160.80 as investors are awaiting the release of the UK employment data. In the early Tokyo session, the cross declined firmly while attempting to sustain above the critical hurdle of 161.50. The dismal market mood kept the cross on the tenterhooks and investors picked the pullback opportunity to create fresh shorts.

Risk-perceived currencies are witnessing an intense sell-off as geopolitical tensions between Russia and Ukraine have fired up again after Ukrainian military troops damaged the Crimea bridge that serves as a supply line for military troops in southern Ukraine. In response to that, Russia intensified missile attacks at Kyiv.

Reports from Reuters cited that Russia has launched its most widespread air strikes since the start of the Ukraine war, raining cruise missiles on busy cities during rush hour and knocking out power and heat.

In today’s session, investors’ focus will be on the UK employment data. The Claimant Count Change is expected to decline by 11.4k vs. an increment of 6.3k. While the ILO Unemployment Rate is seen steady at 3.6%.

As price pressures are at elevated levels in the UK economy, therefore, the Average Earnings data will also remain in focus. The economic data excluding bonuses is seen higher by 10 basis points (bps) to 5.3%. The dismal improvement in the earnings data would be unable to offset the impact of higher payouts by the households. This could dent the sentiment of households further.

Apart from that investors are awaiting the speech from Bank of England (BOE) Governor Andrew Bailey, which is due on Tuesday. BOE policymaker is expected to provide cues for the likely monetary policy action ahead.