British Pound’s (GBP) rally against the Japanese Yen (JPY) was capped at the 217.00 area earlier on Friday, and the pair pulled back to the 216.50 area where it found some support. The moderately positive UK business activity data offset the downbeat Retail Sales figures released earlier on the day and provided a mild impulse to the GBP.
Preliminary UK S&P Global Purchasing Managers Index (PMI) data for July revealed that the UK services sector’s activity accelerated to 52.8 from 52.1 in June, against expectations of a slight decline to 51.8. The Manufacturing PMI, on the other hand, slowed down to 51.5, from 51.9, in line with market expectations, while the Composite PMI ticked up to 52.5 from 52.2 in June, also beating forecasts of a decline to 51.6.
Before that, National Statistics figures revealed that UK retail consumption contracted 0.5% in July, meeting the market’s consensus, and following a 0.7% increase in June. Year-over-year, sales increased at a 1.6% pace, down from 3.8% in June and below the consensus 2.2%.
Japan’s inflation fails to ease Yen’s weakness
In Japan, data released earlier on the day showed that the national Consumer Price Index (CPI) accelerated to a 1.9% year-on-year (Y-o-Y) rate in July, its highest level since December, from a downwardly revised 1.6% in June. Likewise, the core CPI rose to a 1.8% yearly rate from 1.6% in the previous month.
These figures add pressure on the Bank of Japan (BoJ) to hike interest rates in September, but the impact on the Yen has been muted. Investors are increasingly sceptical about the BoJ’s ability to accelerate its tightening path, after Japan’s preliminary Gross Domestic Product (GDP) figures, released earlier in the week, revealed that economic growth slowed down against expectations in the second quarter.
Economic Indicator
S&P Global Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for GBP.
Last release:
Fri Aug 21, 2026 08:30 (Prel)
Frequency:
Monthly
Actual:
51.5
Consensus:
51.5
Previous:
51.9
Source:
S&P Global
Economic Indicator
S&P Global Services PMI
The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for GBP.
Last release:
Fri Aug 21, 2026 08:30 (Prel)
Frequency:
Monthly
Actual:
52.8
Consensus:
51.8
Previous:
52.1
Source:
S&P Global
