Pound Japanese Yen Continues to Climb as Yen Fails to Capitalise on Market’s Mood
A surge in demand for the US Dollar (USD) has not led to a stronger Japanese Yen (JPY), as the Pound Japanese Yen (GBP/JPY) exchange rate continues to climb higher and higher. The Pound (GBP) remains appealing itself as markets become more confident about Britain’s economic outlook.
GBP/JPY has been registering gains over consecutive weeks for the past month. Last week saw GBP/JPY make a solid advance from the level of 148.41 to 149.95 – a gain of over a Yen.
This week’s movement has once again been strong, with the pair having already gained another Yen. At the time of writing, GBP/JPY is trending close to a high of 151.24. This was the best level for the pair since May 2018, almost three years ago.
Unless upcoming UK data disappoints investors, the Pound to Yen exchange rate may only be in for further gains.
Pound (GBP) Exchange Rates Finding Growing Support
Bets that Britain’s economy will be one of the first major ones to recover from the coronavirus pandemic are finding more and more support.
This is keeping the Pound appealing, making it easier for the currency to sustain recent surges and even keep climbing.
Today, a fresh report from the Organisation of Economic Co-operation and Development (OECD) stated that momentum in Britain was especially good due to the nation’s coronavirus vaccination rollout.
This helped the Pound to maintain its impressive bullish movement today.
Japanese Yen (JPY) Exchange Rates Fail to Benefit from Market’s Mood
The Japanese Yen is a safe haven currency. This means it is often appealing in times of global market uncertainty.
However, despite some slight risk-off movement in the past week, market movement has been largely focused on the Yen’s rival the US Dollar (USD).
Last week’s news that US fiscal stimulus had been passed, combined with some stronger than expected US Non-Farm Payroll data, bolstered the US outlook but also bolstered the global economic outlook.
This means that the US Dollar has been surging but markets remain fairly optimistic overall. Amid strength in its rival and relatively optimistic global markets, the Yen has been highly unappealing and has been weakening against many other major currencies.
Pound Japanese Yen (GBP/JPY) Exchange Rate Could Climb Even Higher if UK Data Impresses
The Pound’s rally may be slowing down, but the British currency could take advantage of Yen weakness and climb even higher if upcoming UK data impresses investors.
Friday will see the publication of a slew of key UK ecostats. Trade balance, production and growth rate results from January will all be published.
If Britain’s economic activity was better in January than expected, optimism about Britain’s 2021 economic activity could rise further and the Pound’s current strong streak could be extended.
On the other hand though, poor UK data could cause markets to rethink this current Pound bullishness.
As upcoming Japanese data will be fairly low-influence, such as PPI data tomorrow, weak UK data may be the Yen’s best opportunity to regain some ground against Sterling.
Japan’s coronavirus situation will remain in focus as well. If the nation’s situation improves the Yen could strengthen, though it could also benefit from a rise in global market uncertainty if there are fresh complications in the global recovery outlook.
Of course, continued optimism around Britain’s recovery hopes could mean that the Pound Japanese Yen (GBP/JPY) exchange rate outlook remains near its best levels in years.
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