GBPJPY has Inflation and GDP Figures Ahead on Friday

GBPJPY – Daily Chart

The GBP  v JPY has pushed through resistance at the 194.68 level and that becomes support. The next upside target will be at 198.20 for the pound.

The Japanese consumer price index was released at 7:30am HKT and the ex food and energy figure was higher than expected. The standard reading stayed the same at 2.9%.

Investors now wait for the 3pm GDP growth figures from the UK economy. The quarterly figure is expected to show a 0.1% gain.

Core consumer prices in Japan’s capital were higher than a year ago, staying above the central bank’s 2% target and keeping alive market hopes of a near-term interest rate hike. The data is closely watched by BOJ policymakers as a leading indicator of price trends and is showing that companies continue to pass on rising raw material costs to households.

A separate index for Tokyo that strips away both fresh food and fuel costs, rose 2.2% in March from a year earlier after a 1.9% rise in February, the data showed. The BOJ ended its decade-long era of zero rates last year with a 0.5% increase as the bank believed Japan was close to sustainably hitting its 2% inflation target.

Governor Kazuo Ueda said the BOJ will keep pushing up borrowing costs if continued wage gains boost consumption and allow firms to raise prices. A Reuters poll said many analysts expect a BOJ rate hike to come in the third quarter, most likely in July.

A new round of tariffs from US President Donald Trump is set to come into effect on April 2 and includes an import tax on foreign vehicles. That could hurt Japan more than the UK economy.

However, the tax burden in the UK is forecast to rise from approximately 35% of GDP in 2024/25 to 37% in 2027/28, the highest level since current records began in 1948. That is hurting any potential growth and keeping a lid on the British currency.