A relatively respectable consumer prices print and mounting geopolitical unrest hasn’t been enough to resolve the Yen’s downtrend. The decline was initiated by Health Minister Yasuhisa Shiozaki stating that the pension fund will conduct some reforms within existing law. The Pound, meanwhile, is riding high off the back of a hawkish speech made by Bank of England Governor Mark Carney on Thursday in spite of the increasing likelihood of British military involvement in Syria and Northern Iraq.
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 177.9500.
On Thursday Bank of England Governor Mark Carney gave a speech in Wales. He said that the conditions for normalising monetary policy have been all but met, and the first bench mark rate revision is drawing ever closer. The Pound rocketed up against all sixteen of its major traded currency rivals as a result.
Despite mounting geopolitical tensions causing trader risk sentiment to wane considerably, the Japanese Yen hasn’t profited as much as it normally would in these circumstances. The Yen weakness is largely because of Health Minister Yasuhisa Shiozaki, whose ministry oversees the Government Pension Investment Fund. The minister has said the fund will conduct some reforms within existing law. Prime Minister Shinzo Abe also commented that the world’s largest pension fund needs to review its asset allocations as soon as possible.
Yuji Saito, director of foreign exchange at Credit Agricole SA in Tokyo, said; ‘Shiozaki’s comments cleared the market’s misunderstanding that GPIF reform may be rolled back […]Monetary policy divergence between the U.S. and Japan suggests that the Yen’s slide will continue’.
The Pound Sterling to Japanese Yen exchange rate as hit a low today of 177.1200.
Friday’s British data has printed relatively negatively, although the result hasn’t been enough to shake Sterling. The year-on-year Hometrack Housing Survey declined from 5.5% to 5.0%.
Any Sterling declination on Friday is most likely to be as a result of negative sentiment towards the increasing possibility of British involvement in the fight against Isis. As Prime Minister David Cameron pushes for action, parliament will make its final decision later on Friday.
Japanese data on Friday has come in relatively positively, although this has not been enough to rectify the issues brought about by pension reformation. The National Consumer Price Index declined from 3.4% to 3.3% in line with the market consensus. Given that the Bank of Japan’s inflation target is at 2.0% it is dropping in the right direction. This is still a pretty small declination, however, especially when you consider the expansive stimulus employed by the BoJ.
Forecast for the Pound to Yen Exchange Rate
Sterling’s position over the weekend will be dictated by the decision made regarding Britain’s involvement in the fight against Isis. The Pound Sterling to Japanese Yen exchange rate, however, is likely to remain strong as traders price in the potential pension reforms.
The Pound Sterling to Japanese Yen exchange rate has reached a high today of 177.9200.
