Snapshot: Sterling is finding fresh buyers after UK Retail Sales rebounded in today’s 07:00 London print, reinforcing the Bank of England’s cautious, data-dependent stance. This domestic resilience contrasts sharply with the Bank of Japan’s glacial normalisation path, where despite overnight remarks from Deputy Governor Himino, the policy rate remains pinned at a lowly 0.50%.
- With UK Core CPI ticking up to 2.6% and unemployment low at 4.9%, the BoE’s dominant 8-1 vote split looks highly likely to maintain the Bank Rate at 4.50% well into the summer.
- Watch the 08:30 NY macro data slate, as any further backup in US 10-year real yields—currently at 2.23%—could trigger localized risk-off deleveraging and transient Yen short-covering.
Bias into NY: We maintain a structural buy-on-dips bias for GBP/JPY, expecting the massive 400bp policy rate differential to sustain the upside trend, targeting a test of key psychological resistance overhead.