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GBP/JPY continues to advance for the second consecutive day, reaching a new intraday high near 182.60 in the early hours of Tokyo trading on Tuesday. In doing so, the cross-currency pair fails to validate the gloomy UK data in light of the dismal Japanese real wages. Recent increases in Treasury bond yields may also contribute to the quote.

In spite of this, the most recent survey from the British Retail Consortium (BRC) indicates the weakest Retail Sales growth in 15 months, with the 1.8% YoY figure for July compared to 4.2% the previous month. Following the publication of the data, the BRC stated, as reported by Reuters, that British retailers suffered from heavy rain and high inflation in July, resulting in an 11-month low in sales growth.

Notably, Japan's Labour Cash Earnings for June came in above expectations, but real wages were depressing enough to support the BoJ's dovish bias. However, Japan's inflation-adjusted real wages decreased for the fifteenth consecutive month in June, falling to 1.6% YoY from 0.8% the previous month.

Monday, Chief Economist of the Bank of England (BoE), Huw Pill, outlined the two dangers to UK inflation. On the other hand, according to the Summary of Opinions for the Bank of Japan's (BoJ) July meeting, one member stated that the attainment of 2% inflation in a sustainable and stable manner appears imminent. The news, coupled with indications that the Yield Curve Control (YCC) policy will be adjusted with greater care, weighs on the JPY amid dovish BoJ concerns.

It should be noted that the market's mixed sentiment and a light economic calendar combine with cautious optimism ahead of this week's UK GDP and top-tier inflation data from the major economies to boost Treasury bond yields, which favour GBP/JPY purchasers.

In spite of this, Wall Street concluded Monday on a positive note while examining US Treasury bond yields as they continued to consolidate Friday's precipitous decline. In spite of this, the benchmark 10-year US Treasury bond yields rose to 4.10 percent as of press time, while S&P500 Futures remain suspended near 4,538 and struggle to defend the first daily gains in five days.

While stronger US Treasury bond yields favour GBP/JPY buyers, a light economic calendar may enable bulls to maintain control.

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