Play of the Day: GBP/JPY to Extend Its Downtrend After the U.K.’s Jobs Release?

GBP/JPY has been making lower highs and lower lows all month and that’s BEFORE we saw the latest U.K. jobs data!

Data printed earlier showed jobless claimants in the U.K. jumping from 3.1K in January to 16.8K in February. This may have contributed to the unemployment rate coming in at 3.9%, a tad higher than the 3.8% rate that the markets had expected.

But the Bank of England (BOE) and a lot of traders were looking at average wages and, unfortunately for GBP bulls, they kinda point to interest rate cuts.

Average weekly earnings including bonuses went up by 5.6% y/y in the three months to January, lower than the previous 5.8% y/y reading and forecasts of a 5.7% y/y print. Turned out, wage growth slowed for both the public AND the private sector. Blimey!

Meanwhile, average earnings which excludes bonuses rose by 6.1% y/y, which not only missed estimates of a 6.2% y/y uptick but is actually the lowest growth since October 2022.