The yen made slight gains against sterling in Thursday trading as the markets reacted to news that the house price boom in Britain may be slowing.

Analysts see signs of the housing market cooling off as indicative that the wider economy may be heading into choppier waters.

The yen was trading at a peak of 248.28 against the pound late Thursday, an increase on the 248.58 it recorded at close of the previous session.

Gains made by the pound against the US dollar were also lost in light of the housing market data.

Sterling reached a 26-year high of 2.0303 in mid-July and had been hovering around record levels since then.

However, Thursday trading saw the pound fall back to 2.0289, a multi-week low.

Some investors had been speculating that the UK interest rate would reach 6.25 per cent by the end of year, although many have now scaled this back to six per cent.