GBP/JPY oscillates above 163.00 as focus shifts to UK GDP data

• GBP/USD is juggling in a 28-pip range as investors await UK GDP data.
• The BOE is worried over soaring consensus for price pressures.
• Japan’s administration is eyeing measures to paddle up the labor cost index.

The GBP/JPY pair is displaying back and forth moves in a narrow range of 163.00-163.28 from the New York session as investors are shifting their focus toward the UK economic data, which will release on Friday.

The UK economy is facing various headwinds for the past few months. Right from the soaring price pressures to the lower Labor Cost Index and now to political instability after the resignation of UK PM Boris Johnson. Broadly, the cross is facing barricades around 163.50 and is likely to remain vulnerable ahead.

The Bank of England (BOE) is going through the tedious task of handling the roaring price rise index. The inflation rate is 9.4% in the pound zone on an annual basis and BOE Governor Andrew Bailey in his commentary on monetary policy announcement cleared that the inflation rate could go to 13%. So, a consensus of galloping inflation is sufficient to scare out the market participants. In addition to that, de-growth in paychecks by the UK households is an additional mess for the BOE.

On the economic data front, a preliminary estimate for the UK GDP is 2.8% vs. 8.7% the former release on an annual basis. While the quarterly data is expected to report a shrink in economic activities by 0.2% against the expansion of 0.8%.

Meanwhile, the yen bulls are dancing to the tunes of Japan’s cabinet re-shuffle. Japanese Prime Minister Fumio Kishida is set to retain Finance Minister Shunichi Suzuki in a cabinet reshuffle this week. Now, eyes will remain on measures to be taken by the Japanese administration to step up the labor cost index, which is critical to keep the inflation rate above 2%.