Forex Market: GBP/JPY hits session highs as UK jobless claims fall, claimant count rate drops

British pound climbed to daily highs against the Japanese yen on trading Wednesday, following official data to show the number of jobless claims in the United Kingdom fell more than projected and the claimant count rate decreased in February. BoE minutes showed an unanimous vote on policy.

GBP/JPY touched a session high at 169.13 at 9:30 GMT, after which the pair consolidated at 168.95, gaining 0.40% for the day. Support was likely to be received at current session low, 168.09, while resistance was to be encountered at March 18th high, 169.60.

The number of people who filed for unemployment benefits in the United Kingdom decreased by 34 600 in February, following another drop by 27 600 in the prior month. Preliminary estimates pointed to a lesser drop in jobless claims, by 25 000.

The claimant count rate diminished to 3.5% last month in line with expectations from 3.6% in January.

The rate of unemployment in the country, estimated in accordance with methodology by the International Labor Organization (ILO), remained steady at 7.2% during the three months through January compared to the same period a year ago.

These data points will probably continue to support a policy of maintaining interest rates at low levels. The rate of unemployment still remained above BoEs threshold of 7.0%.

In addition, the minutes of Bank of Englands meeting on policy, held on March 6th, revealed that all nine members of banks Monetary Policy Committee (MPC) voted unanimously in favor of keeping the benchmark interest rate and the monthly scale of stimulus unchanged. This came in consonance with expectations.

MPC members expected that unemployment in the country might continue to fall during the upcoming months, according to the minutes.

United Kingdoms annualized rate of inflation is seen to remain below 2.5% during the next 18 to 24 months.

There have been no debates regarding the adverse effects caused by the strong national currency on countrys exports, the minutes showed.

Meanwhile, in Japan, the Ministry of Finance reported earlier today that nation’s trade deficit widened to 800 billion yen (approximately $7.9 billion), exceeding analysts’ estimates of a 600-billion yen shortfall. However, the deficit was much lower than January’s record shortfall of 2.79 trillion yen. Data also revealed that exports rose 9.8% in February from a year earlier, while imports increased 9%. Imports have exceeded exports for 20 consecutive months.

Protracted trade shortfalls and only minor increases in exports after Japanese yen’s recent drop will reinforce the economic turbulence, that Japan is likely to face after the sales-tax increase.

Effective from April, the sales-tax will be raised to 8% from the current level of 5%. This will be the first increase of the levy in 17 years.