Ella 
During the Asian session on Friday, GBP/JPY fell to around 185.60, extending losses for the second consecutive day. The yen (JPY) was supported by benign Japanese inflation data released early on Friday. That is to say, the national consumer price index in July remained at the level of 3.3% year-on-year, better than the expected 2.5%. The annual rate of the national core consumer price index excluding food and energy rose to 4.3% from 4.2% in the previous month. The national core consumer price index excluding fresh food fell to 3.1% from 3.3% in the previous month, in line with expectations.
Additionally, dovish trade data from Japan on Thursday acted as a supportive factor for the yen, potentially limiting GBP/JPY gains. Better-than-expected annual export data may provide some support for the yen, noting that the data actually fell from the previous value, the first decline in the indicator in almost two and a half years.
The drop in Japanese export data was likely due to concerns over a global recession, particularly weakening demand from China. China is Japan’s main trading partner, and a reduction in Chinese demand for goods could ripple through global trade and affect Japan’s economy, which is heavily reliant on exports.
On the other hand, market participants are looking for further clues on the strength of the GBP/JPY pair, which has already shown strength, mainly driven by the release of improved income and inflation data this week.
These resilient economic data are likely to add to market concerns that the Bank of England (BOE) will raise interest rates at its September meeting. Market participants will be keeping a close eye on the monthly UK retail sales figures due later in the day. Consumer spending is expected to fall to -0.5% in July from 0.7% in the previous month.
