Sterling's Downturn and Yen's Revival: Uncertainty in Global Markets

The Sterling took a tumble on Friday, sparked by a surge in Britain's borrowing that surpassed official projections and puzzled fiscal expectations. Investors' confidence wavered amid concerns over finance minister Rachel Reeves' ability to manage the budget effectively.

Despite a surprising uptick in UK retail sales for August, Sterling faced its largest two-day slump since July, showcasing exposure to poor government borrowing data that underscores the fiscal constraints Chancellor Reeves may face ahead of the November budget.

On the other side of the globe, BOJ's decision to maintain steady rates ignited a rally in the yen, reflecting market surprises. The anticipation of future hikes permeates, with global eyes set on the BOJ's upcoming meeting. Meanwhile, U.S. Treasuries see a healthy overseas appetite, reinforcing the dollar's sturdy position.

(With inputs from agencies.)