GBP/JPY drops to near 215.00 even as UK Retail Sales beats estimates

• GBP/JPY edges lower to near 215.00 despite UK Retail Sales rose strongly by 0.6% vs. 0.2% estimates.
• BoE’s Pill supports the need to raise interest rates to tame higher inflation.
• Both the BoJ and the BoE are expected to announce their monetary policies next week.

The GBP/JPY pair finds buyers’ interest above 215.00 during the European trade on Friday after the release of the United Kingdom (UK) Retail Sales data for March. The Office for National Statistics (ONS) has reported that Retail Sales have returned to growth after declining 0.6% in February, revised lower from 0.4%.

The Retail Sales data, a key measure of consumer spending, rose by 0.7% on a monthly basis. The consumer spending measure was expected to return to growth; however, the pace of increase was estimated to be 0.2%.

Going forward, the major trigger for the Pound Sterling (GBP) will be the Bank of England’s (BoE) monetary policy announcement on Thursday, in which officials are expected to hold interest rates steady at 3.75%, according to a Reuters poll.

However, BoE Chief Economist Huw Pill expressed the need to tighten monetary conditions, in an event last week, stressing the need to contain elevating price pressures.

Meanwhile, the Japanese Yen (JPY) trades broadly higher against its major currency peers, with investors awaiting the monetary policy announcement by the Bank of Japan (BoJ) on Tuesday. The BoJ is expected to leave interest rates unchanged at 0.75% while keeping the door open for monetary tightening. BoJ officials are expected to express concerns over the economic outlook in the wake of higher energy prices amid stalled peace talks between the United States (US) and Iran.

Earlier in the day, Japan's Finance Minister (FM) Satsuki Katayama warned of possible intervention against one-sided speculative moves. Katayama said that officials are in close contact around the clock with their US counterparts over speculative moves that are keeping the Japanese Yen (JPY) weak.