GBP/JPY maintains its position above 189.00 psychological level ahead of UK Retail Sales

• GBP/JPY gains ground ahead of a slew of data releases from the United Kingdom.
• UK Retail Sales (MoM) could improve to 1.5% from the previous 3.2% decrease.
• BoJ Governor Kazuo Ueda expects the monetary conditions in Japan to have remained accommodative.

GBP/JPY receives upward support ahead of the release of Retail Sales data from the United Kingdom (UK) due on Friday. The monthly report for January is expected to show an improvement of 1.5%, swinging from the previous decrease of 3.2%. While year-over-year report could print a reading of -1.4% as compared to the previous -2.4 reading. The GBP/JPY cross inches higher to near 189.10 during the Asian trading hours.

GBP/JPY cross faced challenges as the Japanese Yen (JPY) cheered the remarks from Japan's top officials, hinting at a potential intervention in the Forex market. Additionally, the escalated geopolitical tensions in the Middle East could have increased demand for the safe-haven JPY and dragged the GBP/JPY cross downward.

Bank of Japan (BoJ) Governor Kazuo Ueda stated on Friday that the specific methods for rolling back stimulus would hinge on the prevailing economic conditions. Considering the current economic and price outlook, monetary conditions in Japan are expected to remain accommodative even after the cessation of negative rates.

The quarterly growth of Gross Domestic Product (GDP) extended its decline to 0.3% in the fourth quarter of 2023 compared to the previous contraction of 0.1%. The GDP (YoY) growth surprisingly declined by 0.2% against the expected increase of 0.1%, swinging from the growth rate of 0.2%.

The United Kingdom's economy has officially entered a technical recession, marked by two consecutive quarters of negative GDP growth. Furthermore, Bank of England policymaker Catharine L. Mann mentioned that the central bank requires at least one more set of inflation data before determining its next steps.