Pound Japanese Yen (GBP/JPY) Exchange Rate Edges Higher amid Risk-On Mood
The Pound Japanese Yen (GBP/JPY) exchange rate has ticked upward today. A pessimistic outlook regarding Japan’s economy recovery has likely harmed the Yen (JPY). Additionally, a resurgent risk-on trading attitude has likely drawn investors to away from the safe-haven currency.
At time of writing the GBP/JPY exchange rate is at around ¥156.5630, which is up roughly 0.2% from this morning’s opening figures.
Japanese Yen (JPY) Falls as Omicron Undermines Economic Recovery
The Japanese Yen (JPY) has dropped against its major rivals today. A risk-on market mood amid a pullback of Russian troops from the Ukraine border has likely undermined the safe-haven currency. As well as this, fears surrounding Japan’s economic recovery have likely kept gains limited.
Despite Japan’s economy recovering in the last three months of 2021, analysts were concerned that a recent spike in Omicron cases could see a contraction in the first quarter of 2022. Figures on Monday showed that Japan’s economy expanded by 5.4% in October below forecasts of 5.8%.
Rising import and commodity costs have also likely weighed upon JPY. Japanese government officials are concerned that the ongoing tensions at the Ukraine-Russia border could push fuel prices even higher.
Reports that Japan recorded its highest daily Covid-19 death count since the pandemic began could also have caused the Yen to dip today. The country reported 236 deaths on Tuesday amid a sixth-wave of Omicron generated transmissions.
Pound (GBP) Bolstered by Calls for BoE Rate Hike as Inflation Outpaces Wages
The Pound (GBP) has ticked upward against some of its rivals today. Employment figures indicating a tight labour market and poor wage growth have led to further calls for faster rate hikes by the Bank of England (BoE). This has in turn likely supported Sterling.
Figures showed a below-forecast fall to the number of people in employment, dropping by -38K. Job vacancies however hit a fresh record-high of nearly 1.3 million in January, whilst unemployment remained at 4.1%.
With inflation at its highest point since the 1990s, real wage growth fell by 0.1% year-on-year in December whilst wages excluding bonuses fell by 0.8%.
Hannah Slaughter, senior economist at the Resolution Foundation, said:
‘While some policymakers are rightly worried about accelerating nominal wages boosting UK inflation, they should also be worried about Britain simultaneously experiencing the tightest real wage squeeze in generations.’
Comments are closed.