On Tuesday, the Statistic Bureau in Japan released the Household Spending data. It declined by 2.1 percent month-over-moth in May. That public spending number is better. 

It is especially than the decline expectation up to 3.7%. However, that was lower than the previous month which made the increase of 0.1%. There is another progress. 

In a yearly basis, the Household spending in Japan increased by 11.6% in May. That was better than the 10.9% forecast. However, that was still lower than the 13.0% growth speed reached in April. 

That record was affected by the technical recovery after a slight decline happened last year. The consumer spending for the automotive and technologies is the more dominant one. 

The New Coronavirus Wave Weight On the Optimism

The spending growth is continued to slow down several months lately because the new coronavirus wave weighted on the optimism. There is an opinion to note so far. 

It will be difficult for the Japan's (activity) spending to recover if the restrictions on economic activity are not lifted completely. Meanwhile, the  vaccine distribution is slower than expected. 

it is estimated that the positive impact on the economy will not be seen at least until September or longer than that. There is a connection to be paid attention so far. 

The growth speed can be still weak amidst the slow car trade. The cause is the semi – conductor materials which are quite difficult to find. That is quite scarce.

The USD / JPY is Continued to Weaken

Broadly speaking, Japan's Household Spending data this morning was quite disappointing. However, the yen's movement against the US Dollar was not affected by the data release. 

The USD/JPY pair moved in the range of 110.83. They are  0.1 percent lower than the daily Open price. The weakening of the USD is more due to the growing view that the Fed will delay tapering.

The Federal Reserve may delay the rate hikes as long as the US unemployment rate remains high. That is the possibility that may be happened in the market so far. 

Meanwhile, pound sterling increased by 0.2 % again around the level of 1.3857 to the American dollar in an European trading session yesterday. Greenback was underpressured.

The PMI Score for the British Country

The greenback was depressed by disappointing US unemployment data. In fact, cable received an additional boost from the UK Purchasing Managers' Index (PMI) survey results. 

However, the pound's performance against other major currencies looked more defensive. That is especially due to the dovish recent statements of the UK central bank lately. 

Markits/CIPS reported that the PMI score for the UK services sector only declined from 62.9 to 62.4 in June 2021,m. That is happened instead of slumping to 61.7 as stated in the previous PMI estimation. 

As a result, the composite PMI score also increased from 61.7 to 62.2. The report shows a continued economic recovery. It is although the  government delayed the total lifting of social restrictions from.

The GBP / USD is Lifted by the Report

The GBP/USD exchange rate was lifted by the report. It was also hit by the weakening US dollar following the release of US unemployment data last week, as well as the lack of forex trading.

That was related to the America's independence day holiday. On the other hand, the market participants are still wary of the potential shift in the projected UK interest rate hike.

The BoE Governor Andrew Bailey on Friday rexommended the policymakers for not in a rush to raise the interest rates. That was a response to a temporary surge in inflation. 

Market participants have previously signaled that the BoE could raise the interest rates in 2022, or sooner than the US Federal Reserve. However, the Bailey's statement downed those expectations.