GBP/JPY marches towards 183.00 as softer Japan real wages supersede UK’s downbeat retail spending

• GBP/JPY picks up bids to refresh intraday high, up for the second consecutive day.
• UK BRC retail sales data suggests slowest spending in 11 months.
• Japan real wages mark 15-month losing streak in June.
• Firmer yields add strength to recovery moves amid sluggish session.

GBP/JPY remains on the front foot for the second consecutive day, refreshing intraday high around 182.60 amid the early hours of Tuesday’s Tokyo trading. In doing so, the cross-currency pair fails to justify downbeat UK data amid the disappointing Japanese real wages. Also fueling the quote could be the recently firmer Treasury bond yields.

That said, the latest survey from the British Retail Consortium (BRC) marked the weakest Retail Sales growth in 15 months as it prints the 1.8% YoY figure for July versus 4.2% prior. Following the data release, the BRC said, per Reuters, that the British retailers suffered from heavy rain in July on top of the impact of high inflation with sales growth dropping to an 11-month low.

It’s worth noting that Japan’s Labor Cash Earnings came in better-than-forecast for June but the real wages were downbeat enough to defend the dovish bias about the BoJ. That said, Japan’s inflation-adjusted real wages dropped for the 15th consecutive month in June to 1.6% YoY versus 0.9% prior.

On Monday, Bank of England (BoE) Chief Economist Huw Pill cited the two side risks for the UK inflation On the other hand, the Bank of Japan’s (BoJ) Summary of Opinions for the July meeting showed that one member said the achievement of 2% inflation in a sustainable and stable manner seems to have clearly come in sight. The news joins signals of tweaking the Yield Curve Control (YCC) policy with greater care to weigh on the JPY amid the dovish BoJ concerns.

It should be noted that the market’s mixed mood and a light calendar join the cautious optimism ahead of this week’s UK GDP and top-tier inflation data from the major economies to propel the Treasury bond yields, which in turn favor the GBP/JPY buyers.

That said, Wall Street ended Monday on the positive side while probing the US Treasury bond yields as they consolidated Friday’s heavy fall. That said, the benchmark US 10-year Treasury bond yields rose to 4.10% by the press time while the S&P500 Futures remain sidelined near 4,538, struggling to defend the first daily gains in five.

While the firmer US Treasury bond yields favor the GBP/JPY buyers, a light calendar may allow the bulls to keep the reins.

Technical analysis

A one-month-old descending resistance line, around 182.90 by the press time, appears the key upside hurdle for the GBP/JPY buyers.