The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate weakened on Monday. This is likely to be a result of Sunday’s Japanese Corporate Service Price data meeting with expectations. Additionally, sentiment towards Sterling is relatively negative as traders have had some time to digest the cooling growth figures published at the tail-end of last week.
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 173.7300.
Over the past week or so the Pound has gradually lost momentum amid poor domestic data publications and negative sentiment towards the contradictory antics of the Bank of England. Of particular detriment was the UK Gross Domestic Product data, published on Friday, which showed Britain’s economic growth to have slowed from previous readings.
The Japanese Yen has fluctuated considerably over the past week with investors reacting to the rise and fall of geopolitical tensions. An impressive domestic manufacturing score last Thursday has helped contain any major losses.
The Pound Sterling to Japanese Yen exchange rate has fallen to a low today of 173.5000.
On Monday, the Pound dropped around -0.22% against the Yen. This is most likely to be the result of traders holding off from purchasing Sterling ahead of Reported Sales data due for publication later on Monday morning.
With major central banks seemingly happy to hold interest rates in ultra-low positions, sentiment towards the institutions has turned particularly negative. This is especially true for the Bank of England after many traders believed, earlier in the year, that they would pioneer monetary policy normalisation.
Although geopolitical tensions have taken a back seat in trader focus, the Japanese Yen has advanced against the Pound on Monday. Perhaps part of the reasoning behind this is the result from Sunday’s Japanese data. Corporate Service Price met with the median market forecast of 3.5%, which equalled the previous figure.
Pound to Japanese Yen Exchange Rate Forecast to Soften
Once rate hawks have gotten over the increasing likelihood of a sustained, low BoE interest rate, the Pound should rebound from its current slump. Should Reported Sales data improve upon the market consensus of a drop from 31 to 25, a Sterling rally ought to begin.
Japan’s retail sales data, due for publication late on Monday night, is very likely to provoke volatility for the Yen. Both Large Retailers’ Sales and Retail Trade are forecast to decline.
However, a complete lack of British data on Tuesday is likely to see the Pound soften against the Japanese Yen. Those invested in the Pound will be hoping the various speeches from BoE officials over the next few days will help to fuel a rally, rather than prevent one.
The Pound Sterling to Japanese Yen exchange rate has reached a high today of 174.0700.
UPDATE
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 173.8800.
On Monday evening Bank of England Deputy Governor Minouche Shafik gave a speech at the London School of Economics. In the speech she described some trader practise as ‘truly shocking’ in regards to benchmark rigging and other misconduct. Shafik intimated that an extension to bonus clawbacks is likely to occur unless the problems are stamped out.
Sterling has generally declined against most of its major peers as sentiment towards the BoE takes an increasingly negative turn.
The Japanese Yen is fairing little better on the currency market after small business confidence declined from 47.6 to 47.4 despite predictions of an increase to 48.5.
Japanese Yen (JPY) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Japanese Yen,
,US Dollar,0.0092,
Japanese Yen,,Euro,0.0073,
Japanese Yen,,Pound,0.0057,
Japanese Yen,,Australian Dollar,0.0105,
US Dollar,,Japanese Yen,107.8355,
Euro,,Japanese Yen,136.7567,
Pound Sterling,,Japanese Yen,173.6368,
Australian Dollar,,Japanese Yen, 95.0502,
[/table]
