The /n/ sound is spelled with <n>, <kn> or <gn> in gnu. The /j/ sound is spelled with <y>, and occurs in the letter name U.
This is a contrast between a nasal continuant and a palatal semivowel, both in the alveolar region and both voiced. It can only occur initially or medially. It is not a problem.
The mean density value is low at 0.4%. The lists make 32 semantic distinctions, a loading of 57%.
gnaw yaw gnawed yawed gnawing yawing gnaws yaws gnaw yore gnaw your gnaws yours gnu yew gnus yews gnu you gnus use knack yak knacks yaks knap yap knapped yapped knapping yapping knaps yaps knee ye kneeled yield knell yell knells yells knob yob knobs yobs knot yacht knotted yachted knotting yachting knots yachts nap yap napped yapped napping yapping naps yaps nay yea née yea narrow yarrow narrows yarrows near year nears years neigh yea neighs yeas Nell yell ness yes nesses yeses net yet new U news U's nippy yippee noose use noosed used nooses uses nor yaw nor yore nor your not yacht snood pseud snoods pseuds snood sued snooze sues
John Higgins, Shaftesbury, December 2010.