• GBP/JPY rebounds from its lowest level of 180.10 since January, recorded on Monday.
• Japan’s Labor Cash Earnings rose by 4.5% YoY in June, the highest increase since January 1997.
• The Pound Sterling received pressure as sluggish market sentiment has dampened the appeal of risk-sensitive currencies.

GBP/JPY trades around 184.50 during the European hours on Tuesday, rebounding from its lowest level of 180.10 since January, recorded on Monday. However, The GBP/JPY cross faced challenges as the Japanese Yen (JPY) strengthened due to growing expectations that the Bank of Japan (BoJ) may implement further monetary policy tightening.

Japan’s Chief Cabinet Secretary Yoshimasa Hayashi stated on Tuesday that “wage increases are expected to extend to part-timers and small businesses by autumn, supported by strong Shunto results and minimum wage hikes.” Hayashi did not provide comments on foreign exchange levels.

Japan’s Labor Cash Earnings came in at 4.5% year-on-year increase in average income for June, exceeding both the previous 2.0% and the expected 2.3% readings. This is the highest increase since January 1997, reinforcing Japan's transition toward a rising interest rate environment.