GBP/JPY extends its decline below 198.00 on risk aversion, weak UK data

• The Pound dips further after the downward revision of UK manufacturing activity.
• A risk-averse market is supporting the Yen as traders digest a new list of tariffs by US President Trump.
• The Japanese Finance Minister Kato has expressed his concern about the recent Yen weakness.
  

The Pound is nursing losses for the third consecutive day against the Japanese Yen, on track for a 0,65% decline this week. The risk-averse market on the day Trump signed the executive order for trade tariffs and the downward revision of UK manufacturing activity are punishing the Sterling.

Business activity in the UK manufacturing sector contracted more than previously thought, according to the final release of the S&P Global PMI reading, which was revised down to 48.0 from the previously estimated 48.2 reading.

These figures follow the downbeat retail consumption and employment numbers released last week and strengthen the case for further BoE easing after next week's meeting, adding bearish pressure on the Pound.

The Yen, on the other hand, is being supported by higher demand for safe assets as market sentiment plunged after Trump announced new trade tariffs, which will finally come into effect on August 7.

Earlier on Friday, Japan's Finance Minister, Katsunobu Kato, voiced the authorities' concerns about the recent Yen depreciation. These comments have triggered speculation that the Bank of Japan might intervene in case of further JPY decline, which is keeping Yen sellers in check on Friday.