GBP/JPY bulls struggle below 185.00 on downbeat UK inflation clues, Japan employment data

• GBP/JPY struggles to extend two-day winning streak amid mixed concerns.
• Sluggish yields join downbeat UK inflation clues, Japan employment data to prod cross-currency traders.
• Buyers stay hopeful as UK markets open after a long weekend and can react to Jackson Hole, downbeat data at home.
• BoJ’s defense of ultra-easy policies, higher Japan Unemployment Rate prod pair’s upside amid inactive session.

GBP/JPY retreats from intraday high to 184.60 as it lacks upside momentum after a two-day winning streak amid mixed catalysts from the UK and Japan. Also probing the pair buyers are the downbeat US Treasury bond yields and cautious mood as the British traders return after Monday’s bank holiday.

Earlier in the day, the British Retail Consortium’s (BRC) annual shop price inflation slumped to the lowest level since October 2022 while flashing 6.9% mark for August, versus 7.6% reported in July.

On the other hand, Japan’s Unemployment Rate offered a surprise increase to 2.7% for July versus 2.5% expected and prior while the Jobs / Applicants Ratio eased to 1.29 for the said month versus 1.30 anticipated and previous readings.

Elsewhere, the US 10-year Treasury bond yields dropped three basis points (bps) to 4.20% and the two-year counterpart declined half a percent to 5.5% the previous day while extending last week’s pullback from the multi-month high. That said, the US 10-year Treasury bond yields remain pressured near 4.19% by the press time whereas the S&P 500 Futures lack clear directions as we write.

Further, the mixed details of Japan’s Coincident Index for June and the Leading Economic Index for the said month also prod the GBP/JPY pair traders. It’s worth noting that Bank of Japan (BoJ) Governor Kazuo Ueda cited a bit below target Japan inflation to defend the currently ultra-easy monetary policy at the Jackson Hole Symposium, which in turn keeps the pair buyers hopeful.

Looking ahead, the British traders’ return to the table and a reaction to last week’s hawkish bias of Bank of England (BoE) Deputy Governor Ben Broadbent will be important to watch. That said, BoE’s Broadbent cited the need for higher rates due to the wage pressure at the Jackson Hole Symposium, his economic outlook seems to challenge the hawks and the British Pound (GBP) optimists.

Technical analysis

Despite the latest inaction, a clear rebound from 21-DMA, around 184.00 by the press time, keeps the GBP/JPY buyers hopeful.