The pound remained range-bound against the yen yesterday following the release of lower-than-anticipated economic data from both the UK and Japan. While Japan’s final industrial production data for April missed estimates, the UK’s Claimant Count Change data did not meet economists’ expectations. Overall, the GBP/JPY pair remained range-bound between 162.45 and 164.20 in the last 24 hours.
According to the final data published by the Japanese Ministry of Economy, Trade and Industry (METI), the country’s industrial production fell by 1.50% m-o-m in April, following a 0.3% growth in the prior month, and worse than the flash figure of a 1.30% contraction. Economists did not anticipate any change in the flash figures. The reported figure represents the initial decline in the industrial output since January, against the backdrop of the impact of the COVID-19 pandemic.
The shipments index fell by 0.30% m-o-m to 93 in April. Likewise, the inventories index declined 2.30% m-o-m to 98.60. Also, the inventory ratio dropped by 2.80% to 116.
The decline was led by electronic parts and devices, which dropped by 6.60% in April. Production machinery fell by 2.70%. Likewise, motor vehicles declined by 0.70%. On a y-o-y basis, industrial output plunged 4.90% y-o-y in April, following a 1.70% drop in March.
According to the data published by the UK Office for National Statistics, the country’s Claimant Count, which reflects the change in the number of people claiming unemployment-related benefits, declined by 19,700 in May, following a drop of 56,900 in the prior month. Economists had anticipated the unemployment claims to fall by 40,300. The reported figure reflects the 15th successive monthly decline.
In the meanwhile, the unemployment rate inched higher to 3.80% in April, from 3.70% in March, and disappointed economists who were anticipating a decline in the jobless rate to 3.60%.
The UK employment rate rose by 0.20% q-o-q to 75.60% but remained below pre-pandemic February 2020 levels. The count of pay-rolled employees increased 90,000 to a historic high of 29.60 million.
Between February and April, the aggregate weekly hours worked grew by 12.20 million hours to 1.04 billion hours, compared with the earlier quarter. Nevertheless, the figure is 7.60 million lower than pre-COVID-19 levels.
The jobless rate fell by 0.2% in the February to April period. However, the economic inactivity rate declined by 0.10% to 21.3% in the same period. The count of job vacancies increased to a historical high of 1,300,000 in March to May.
The mixed economic data is expected to keep the GBP/JPY pair range-bound in the short term.
The historical price chart indicates that the GBP/JPY pair is declining after facing resistance at 164.20. The next minor and major support are anticipated only near 161.40 and 157.50, respectively. Additionally, the stochastics indicator is in the bearish region while the currency pair is trading below its 50-day moving average. Therefore, the GBP/JPY pair is anticipated to remain in a downtrend in the short term.
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