GBP/JPY rises above 194.00 following Japan's real wages

• GBP/JPY appreciates as the Japanese Yen gains ground following the real wages data.
• Japan's real wages fell 2.3% YoY in April as persistent inflation outpaced nominal wage growth.
• Trump signed an executive order to provide UK exporters a temporary relief from the 50% tariffs on steel and aluminium.

GBP/JPY recovers its recent losses registered in the previous session, trading around 194.30 during the European hours on Thursday. The currency cross appreciates as the Japanese Yen (JPY) loses ground following the labor market data.

Japan's real wages declined by 2.3% year-over-year, declining for the fourth successive month in April amid persistent inflation outpacing nominal wage growth. Meanwhile, nominal wages increased 2.3% YoY, remained consistent with the March's pace but below the market expectations of a 2.6% increase.

The weak employment data, along with the global economic uncertainty amid rising US tariff tensions, deepened Japan's economic concerns. The Japanese Yen attracts sellers also because the wage data have complicated the Bank of Japan's (BoJ) path toward policy normalization.

However, the JPY may regain its ground amid growing expectations that the Bank of Japan (BoJ) will hike interest rates. The BoJ Governor Kazuo Ueda expressed willingness to increase interest rates if economic and price data move in line with forecasts.

S&P Global released the UK Composite Purchasing Managers' Index (PMI), which rose to 50.3 in May, from April's 48.5 reading. This reading came higher than the preliminary estimate of 49.4. Meanwhile, the Services PMI edged higher to 50.9, indicating a weak but marginal growth.

Moreover, exporters in the United Kingdom (UK) will still face the previous 25% tariff rate, as US President Donald Trump signed an executive order on Tuesday, granting temporary relief to the UK from the steep 50% US tariffs on steel and aluminium.