The GBP/JPY cross is hovering around 199.00.

The British Pound/Japanese Yen showed no clear movement during the Asian trading session, fluctuating around 199.00.

The British Chancellor of the Exchequer, Hunt, recently spoke. She aims to strictly control spending, suppress inflation, and reduce borrowing costs. That's good. The market's concerns about government finances seem to have eased a bit. UK bonds had previously sold quite poorly. The UK services PMI data was unexpectedly good, providing support for the pound.

What about the yen? Weak. Domestic politics are a mess, and the Bank of Japan's statements are ambiguous. Deputy Governor Shimino revealed that they are not in a hurry to raise those pitifully low borrowing costs. Governor Ueda did say that if the economy and prices meet expectations, they would continue to raise interest rates. Who knows?

Investors seem to have come to a conclusion. Wages are rising, inflation is pressing, and the economic outlook is looking a bit brighter — the Bank of Japan is likely to continue its "normalization". How about over in the UK? Governor Bailey hinted that interest rates will gradually decrease. With the central bank policies differing on both sides, traders are hesitant. It's a bit difficult for GBP/JPY to rise.

Now everyone is focusing on the UK construction PMI, hoping for some movement during the European session. The next highlight is the Japanese wage growth data. This is quite critical as it directly influences market speculation on when the Bank of Japan will raise interest rates next. How the yen will move and how the GBP/JPY will react depends on this.

Economic Indicators

S&P Global Construction PMI

The PMI of the construction industry is released monthly by S&P Global. It serves as a "barometer" for the UK construction industry. They survey executives in the private services sector and ask how this month compares to last month. This data is quite impressive; it can predict changes in GDP, employment, and inflation.

The index fluctuates between 0 and 100, with 50 meaning "the same as last month." Above 50, the construction industry is expanding, and the pound should be happy. Below 50, builders are having a tough time, and the pound may be crying.

Next Announcement: Thursday, October 4, 2025 08:30

Frequency: Monthly

Market expectation: 45.2

Previous Value: 44.3

Data Source: S&P Global