The GBP/JPY currency pair settled above Friday’s low of 211.28, its weakest level since May 6th, as ongoing political instability in the United Kingdom continued to weigh on the Pound and remained a primary drag on the pair.
Britain’s Health Minister Wes Streeting resigned from the government on Thursday, citing irreconcilable differences over the government’s handling of public health policy and budget allocations.
At the same time, UK Prime Minister Keir Starmer is facing calls to step down after the ruling Labour Party suffered heavy losses in last week’s local elections.
Meanwhile, persistent geopolitical risks have lent support to the Japanese Yen’s safe-haven appeal, adding further downward pressure on GBP/JPY.
Still, there is certain caution among Yen bulls amid concerns about economic fallout from tensions in the Middle East. Those worries resurfaced after data released on Friday showed that Japan’s Producer Price Index had risen 4.9% year-on-year in April, driven by higher oil and import costs linked to the Iran war.
Speculation that Japanese authorities could intervene again to curb the Yen’s weakness against a broadly stronger US Dollar is also in focus. This potential policy response, combined with the broader fundamental backdrop, supports the case for additional downside in GBP/JPY.
The minor Forex pair lost 0.52% for the week.
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