GBP/JPY faces barricades above 160.50, Japan Employment data in focus

• GBP/JPY is sensing offers above 160.50 amid a higher forecast of Japan’s labor data.
• Japan’s officials are worried over the rock-bottom inflation rate in the economy.
• The UK’s S&P Global Manufacturing PMI may remain stable at 54.6.

The GBP/JPY pair is witnessing selling pressure after re-testing Thursday’s high at 160.83 in the Asian session. A sense of exhaustion has been observed while making an attempt to kiss weekly highs around 161.00. The cross is likely to display weakness going forward on the expectation of a mild improvement in Japan’s Jobs/Applicants ratio.

The Statistics Bureau of Japan is expected to display an improvement in the above-discussed economic catalyst to 1.23 against the prior print of 1.22. Also, the Unemployment Rate is expected to remain unchanged at 2.6%.  This indicates a tight labor market in Japan, which will strengthen the Japanese yen against pound ahead.

Meanwhile, Bank of Japan (BOJ)’s policymakers are worried about the lower inflationary pressures. Last week, Japan’s Prime Minister Fumio Kishida urged to the Bank of Japan (BOJ) that it should make some efforts to achieve the targeted inflation rate of 2%. In response to that BOJ Governor Harihuko Kuroda stated that the price rise should be accompanied by a wage hike if stable inflation is required at desired levels.

On the pound front, investors will focus on the S&P Global Manufacturing PMI, which is expected to remain stable at 54.6. A light economic calendar on pound front this week will focus more on the comments from the Bank of England (BOE). A lightning spark in the Consumer Price Index (CPI), recorded for April at 9.1% is advocating a jumbo rate hike by the BOE.  The UK inflation is mounting higher, which propels the BOE Governor Andrew Bailey to dictate a 50 basis point (bps) rate hike.