Bank of Japan decided to lift interest levels from 0.5% to 0.75%, its highest level since back in 1995. Members from BoJ stated that it is likely to continue raising interest rates if their forecasting is materialising. What they refer to is their outlook on price increases and wages to continue growing. Members also mentioned that their previous view that growth and inflation would stagnate due to the impact of US tariffs have changed and moving forward the conviction of inflation levels reaching the 2% target is higher. Market very likely expected JPY to take gains from the monetary shift, we have seen pairs like GBP/JPY and USD/JPY move up almost 1%. Shift has come from a selloff of JPY and seeing Nikkei (Tokyo stock exchange) jump by over 1%.
UK retail sales were a lot weaker than expected for November. Actual figures month-on-month saw a decline of -0.1% compared to its forecast of an increase to 0.4%. October recorded a decline of -0.9%, so even if retail sales improved its still in negative territory. November is normally seen as a strong performing month for retail sales with the lead up to Christmas and Black Friday sales. The continuing decline in employment across the UK followed by slowing wage growth is a leading factor to less foot traffic. On top of this, the retail sector signalling that concerns from consumers were also underlying with the budget announcement and that household held off spending further.
GBP/EUR 1.1410 GBP/USD 1.3369 GBP/AED 4.9116
GBP/AUD 2.0239 GBP/CHF 1.0630 GBP/CAD 1.8446
GBP/NZD 2.3264 EUR/USD 1.1700 GBP/ZAR 22.4525