Sterling Declines Against Yen Following Softer UK Inflation Data

The GBP/JPY pair has retreated below the 215.00 level as cooler-than-expected UK inflation figures diminished expectations for further Bank of England rate hikes, while the Japanese Yen gained strength amid persistent market speculation regarding official currency intervention and the Bank of Japan's recent move to raise interest rates. Although the widening policy divergence between the central banks exerts downward pressure on the pair, traders remain cautious due to ongoing interest rate differentials that continue to support carry trade activity, making it essential to monitor the upcoming UK jobs report and Bank of England policy meeting for clearer trends.

The FTSE 100 index opened down 6.87 points, 0.1%, at 10,487.34. The FTSE 250 was up 91.76 points, 0.4%, at 23,417.82, and the AIM all-share was up 1.30 points, 0.2%, at 805.23. The Cboe UK 100 was down 0.2% at 1,040.82, the Cboe UK 250 was up 0.2% at 20,111.72, and the Cboe small companies was up 0.2% at 18,509.99.