GBP/JPY hits session lows near 202.30 after weak UK employment data

• The Pound retreated from highs near 203.20 to session lows right above 202.30 on Tuesday.
• UK employment data disappoints and paves the path for further BoE monetary easing.
• Risk appetite and pressures on the BoJ to keep an easy monetary policy are weighing on the Yen.
  

The Pound has come under pressure on Tuesday, following disappointing UK labour market data. The GBP/JPY extended its reversal from Monday’s highs near 203.20 to session lows right above 202.30, before picking up to the 202.60 area at the time of writing.

Data released by National Statistics earlier on the day showed that the ILO Unemployment Rate rose to a four-year high of  5% in the three months to September, against expectations of a steady 4.9% reading.

The higher jobless rate comes on the back of a 29,000 increase in jobless claimants in October, which surpasses the market consensus of a 20,300 increase following a 400 increase in the previous month. These figures have taken the claimant count rate to 4.4% in October,, up from 4.3% in September.

Beyond that, wage growth has eased to a 4.8% year-on-year pace in the three months ending in September, from 5% in the previous month, disappointing markets, which were expecting a 4.9% reading. These figures, coupled with the steady consumer inflation numbers released in October, pave the path for further BoE monetary easing in December.

From a broader perspective, the pair remains steady near recent highs with Yen weakness keeping the Sterling from falling further. A higher appetite for risk on hopes of a US government reopening and Japanese PM Takaichi’s comments pressuring the  Bank of Japan (BOJ) against hiking rates in December, are keeping the JPY on the back foot on Tuesday.