• GBP/JPY gains ground as the UK key economic data loom this week.
• BoE policymaker Catherine Mann expressed that UK wage growth remains a concern for inflation.
• The upside of the GBP/JPY cross could be limited due to safe-haven flows amid increased Middle East tensions.

GBP/JPY edges higher to near 187.90 during the European session, following thin trading as the Japanese market observed Mountain Day on Monday. Traders are now awaiting the release of monthly UK employment data on Tuesday, followed by consumer inflation figures on Wednesday. These economic reports could offer new insights into the UK’s economic conditions, which may influence the Bank of England’s monetary policy outlook.

On Monday, Bank of England (BoE) policymaker Catherine Mann expressed concerns in a podcast with the Financial Times (FT) about UK wage growth, noting it remains a key issue for inflation. Despite the main rate holding steady at the BoE's 2% target in June, Mann continues to worry about potential upward pressures on inflation.

The upside potential for the GBP/JPY cross might be constrained as Japan's monetary policy outlook indicates that the Bank of Japan (BoJ) officials are prepared to raise rates further. However, they have adopted a more cautious stance due to the heightened market volatility observed last week