Bank of England Governor Mark Carney made a hawkish speech in Wales on Thursday in which he said that many of the prerequisites for monetary policy normalisation have been met. The speech has had the immediate effect of pushing Sterling higher against the majority of its currency peers. Japanese data was negative on Thursday, but serious losses have been avoided thanks to its safe-haven qualities.
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 178.4000.
After the initial surge gained from the Unionist victory in the Scottish independence referendum, Sterling has struggled against a succession of trader profit buying. With a lack of economic data to curtail the downtrend Sterling has been subject to large losses against many of its major traded currency competitors.
Despite the few Japanese data publications printing relatively poorly; the Yen has held in a positive position against many of its rivals in response to growing geopolitical unrest. The issues concerning Israel, Syria and Northern Iraq has led traders to adopt risk aversion strategies; favouring investment in safe-haven assets like the Japanese Yen.
The Pound Sterling to Japanese Yen exchange rate has hit a low today of 177.7600.
On Thursday Sterling has enjoyed a large boost courtesy of Mark Carney after he made a speech in Wales. In the speech Carney said an interest rate hike is getting closer; ‘The point at which interest rates […] begin to normalise is getting closer,’ he said. ‘In recent months the judgement about precisely when to raise Bank Rate has become more balanced. While there is always uncertainty about the future, you can expect interest rates to begin to increase’.
The British economy is on course to grow by over 3% this year, which is faster than any other major economy, and unemployment has tumbled to its lowest level since 2008.
Forecast for the Pound to Japanese Yen Exchange Rate
With nothing in terms of significant data on Friday Sterling is likely to continue to gain off the back of Carney’s hawkish comments. There is always the possibility, however, that a massive surge will be brought back to Earth if traders opt to lock their profits.
Friday’s economic calendar contains a plethora of Japanese data. The most influential of these, in terms of the potential provocation of volatility, is the National Consumer Price Index which is forecast to fall from 3.4% to 3.3%. As the most important indicator of inflation, CPI figures are closely followed by the Bank of Japan. Foreign Stocks and Bonds data will also be of interest to those invested in the Japanese Yen.
The Pound Sterling to Japanese Yen exchange rate has reached a high today of 178.4900.
UPDATE
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 177.9600.
Sterling soared to a high position against the Japanese Yen after Bank of England Governor Mark Carney made a speech in Wales. Sterling has since softened a little which could be attributed to either a spate of trader profit locking, or in reaction to the likelihood that Britain will join the US in air striking Syria and Northern Iraq.
The Japanese National Consumer Price Index has printed relatively positively and in line with the median market forecast. A drop from 3.4% to 3.3% is taking the inflation rate closer to the Bank of Japan’s target of 2.0%.
