GBP/JPY extends gains, nearing 204.00 after upbeat UK Retail Sales

• The Pound hits fresh two-week highs right below 204.00 against a weakened Yen.
• An unexpected increase in UK retail sales has provided a fresh boost to the Sterling.
• The yen remains offered on the back of speculation about a large stimulus plan for Japan.

The British Pound has accelerated its uptrend on Friday, reaching fresh two-week highs in the area of 203.90, buoyed by an unexpected increase of September's UK Retail Sales figures, and is on track to close the week with a o0.8% advance, its best weekly performance since July.

Data released by National Statistics earlier on Friday revealed that retail consumption rose 0.5% for the fourth consecutive month in September, against market expectations of a 0.2% decline. Beyond that, August's reading has been upwardly revised to a 0.6% reading from the previously estimated 0.5%.

The unexpected increase in retail consumption has been due to a sharp increase in computer and telecom products nd higher sales for gold in online jewellers. These figures have improved the outlook of the UK economy, questioned after the soft CPI figures seen earlier this month, and have provided additional support to the British Pound.

The Yen, on the other hand, remains on its back foot amid speculation that Japan's new Prime Minister would be planning to approve a USD 90 million stimulus package to help households cope with the rising inflation.

Investors' concerns about the health of the country's public finances have been undermining confidence in the yen since the fiscal dove Takaechi took charge. The hotter National CPI figures seen on Thursday failed to provide any significant support to the Yen as investors are dialing down hopes of a BoJ rate hike, at least until the stimulus package is voted on in the parliament.