Ella 
During early European trading on Thursday, GBP/JPY crossed at around 188.15, falling for a third consecutive day. The yen (JPY) strengthened as a report on real wage growth in Japan reinforced expectations of further rises in borrowing costs.
Data released by Japan’s Ministry of Health, Labor and Welfare on Thursday showed that Japan’s labor force’s cash income increased by 3.6% year-on-year in July, while it increased by 4.5% in June, higher than the expected 3.1%. The upbeat data fueled speculation that the Bank of Japan (BoJ) will raise interest rates again before the end of 2024.
“If the economy and price trends are in line with our forecasts, we will adjust the policy interest rate in several stages,” Bank of Japan board member Tsunehisa Takada said on Thursday.
On the other hand, expectations of interest rate cuts from the Bank of England (BOE) weighed on the pound (GBP) exchange rate against the yen. The Bank of England is expected to cut interest rates again this year, keeping borrowing costs at 4.75%, according to money market pricing data. However, the release of the latest UK Services Purchasing Managers’ Index (PMI) is likely to support GBP and limit the pair’s downside. Data from S&P Global showed that the UK’s Services Purchasing Managers’ Index (PMI) grew at the fastest pace since April in August.
