• GBP/JPY attracts fresh buyers on Friday, though it struggles to capitalize on the positive move.
• Mixed UK macroeconomic releases do little to impress the GBP bulls or provide any impetus.
• Economic risks due to the Mideast conflict undermine the JPY and offer support to the cross.

The GBP/JPY cross regains positive traction following the previous day's good two-way price moves and sticks to intraday gains through the first half of the European session on Friday. Spot prices, however, struggle to capitalize on the strength beyond the 215.00 psychological mark and move little following the release of the UK data dump.

The UK Office for National Statistics reported that the economy contracted by 0.1% in April as the impact of the Middle East shock began to filter through. Adding to this, the UK Industrial Production remained flat as compared to a 0.1% rise expected. The negative readings, however, were offset by a surprisingly 0.4% growth in the UK Manufacturing Production and do little to provide any meaningful impetus to the British Pound (GBP).

Meanwhile, the Japanese Yen (JPY) continues with its relative underperformance amid worries that the domestic economy will remain under strain due to the continued disruptions to energy supplies on the back of the Middle East conflict. However, fears that Japanese authorities will step in again to prop up the domestic currency hold back the JPY bears from placing aggressive bets amid hawkish Bank of Japan (BoJ) policy expectations.

The Japanese central bank is widely expected to raise interest rates at its upcoming monetary policy meeting on June 15-16. In contrast, the Bank of England (BoE) policymakers appear reluctant to rush into interest-rate rises in response to the energy shock triggered by the Iran war. Adding to this, the prospect of a leadership challenge for UK Prime Minister Keir Starmer keeps a lid on the GBP and contributes to capping the GBP/JPY cross.