GBP/JPY hovers above 1-month low after BoJ’s Ueda comments

The GBP/JPY currency pair registered a sizable retreat on Monday, after Bank of Japan Governor Kazuo Ueda said the central bank could discontinue its policy of negative interest rates when the 2% inflation target is achieved.

“Once we’re convinced Japan will see sustained rises in inflation accompanied by wage growth, there are various options we can take,” BoJ’s Ueda said in an interview with the Yomiuri newspaper over the weekend.

“If we judge that Japan can achieve its inflation target even after ending negative rates, we’ll do so,” the BoJ Governor said.

Ueda once again highlighted the need to keep monetary policy accommodative until the central bank is convinced inflation will sustainably remain at levels near 2%, backed by robust demand and wage growth.

“It seems that Ueda’s comments were intended to stop the yen’s slide against the dollar,” Takehiko Masuzawa, trading head at Phillip Securities Japan, was quoted as saying by Reuters.

“His comments are working almost the same as government intervention.”

Meanwhile, Pound traders now look to UK jobs data due out on Tuesday. The unemployment rate in the country probably rose to 4.3% in the three months to July, according to market consensus, from 4.2% in the three months to June.

Average weekly earnings, including bonuses, probably surged 8.2% year-on-year in the three months to July, following similar growth in the previous period. It has been the sharpest year-on-year growth rate since the three months to July 2021.

As of 7:28 GMT on Monday GBP/JPY was losing 0.75% to trade at 182.746. Earlier in the session, the minor Forex pair went down as low as 182.683. The latter has been the pair’s weakest level since August 10th (182.659).