Sterling has taken a tough knock on Monday after a recent YouGov poll found the voting on Scottish independence to have swung in favour of separation. The Yen has also been a little punch drunk on Monday after a succession of hard-hitting negative economic data publications.
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 170.1100.
Last week saw the Pound steadily fall against nearly all of its competitors after the Scottish bid for Independence was brought into sharper focus. A YouGov poll showed that the unionists lead had faded from 22% to 6% in less than a month.
The Japanese Yen was bolstered in the early half of last week by increased geopolitical tensions, but lost some ground after the Russia Ukraine conflict seemed to have abated. The Yen also lost some ground after policymakers at the Bank of Japan elected to continue with the current stimulus package; keeping the quantitative easing annual rate at around 60-70 trillion Yen.
The Pound Sterling to Japanese Yen exchange rate has hit a low today of 169.2700.
Monday has seen traders pull away from Sterling in droves after the latest YouGov poll made for heightened risk. Having removed those who were undecided on their vote there has been a change in leadership; the nationalists now have a 51% lead over the unionists. Until the conclusion of the Scottish referendum it is unlikely that Sterling will make any significant gains as Luke Zorab, writing for Exchange Rate News, explains:‘Trader reaction to this news was to be expected as a severed 307-year-old union presents far too many unknowns to risk investment prior to the conclusion of the referendum on 18th September’.
Those invested in the Yen would have been very unhappy to see the Japanese economic data results on Monday. Annualised Gross Domestic Product contracted by -7.1% in the second quarter having been forecast at -7.0%. Quarter-on-quarter Gross Domestic Product met with the forecast figure of -1.8% and Bank Lending including Trusts rose from 2.2% to 2.3%. However Trade Balance saw an unhealthy increase from 537.1 billion to 828.1 billion, and the Current Echo Watchers Survey fell below the 50 mark which separates growth from contraction at 47.4.
Tuesday’s Forecast for the Pound to Japanese Yen Exchange Rate
There are several British economic data publications on Tuesday which will be of interest to those wishing to gauge the UK’s economic standing, although they may not spark much positive Sterling movement as the focus on the Scottish Referendum is likely to overshadow the data. Of particular importance, however, is the NIESR Gross Domestic Product Estimate which currently stands at 0.6%.
British Industrial Production is expected to rise from 1.2% to 1.3% and Manufacturing Production is forecast to increase from 1.9% to 2.2%. Total Trade Balance, Total Trade Balance Non EU and Visible Trade Balance may also be of interest to those few left who are still invested in Sterling.
Tuesday also has a reasonably packed economic calendar for Japan. The Bank of Japan will be releasing the minutes from the policy meeting held between the 7th and 8th of August. Meeting minutes are always closely scrutinised and economists will be looking for any indications of dissent.
The Japanese Tertiary Industry Index is forecast to hit 0.2% from the previous figure of -0.1%, Consumer Confidence is predicted to increase from 41.5 to 42.3 and Machine Tool Orders may be of interest having hit 37.7% previously.
UPDATE
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 171.1400.
Tuesday’s Japanese economic data has been generally poor and the Yen has lost ground across the board as a result. The Consumer Confidence Index was forecast to rise from the previous figure of 41.5 to 42.3, but the actual data was a disappointing score of 41.2. Also the Tertiary Industry Index failed to meet with expectations printing a flat line figure despite having been forecast to rise by 0.2%.
British economic data was mixed on Tuesday with both Industrial and Manufacturing production yielding positive results, but Total Trade Balance failing to meet with the forecast figure.
