GBP/JPY Exchange Rate Rangebound as Japanese Trades Brace for US-China Trade Discussions
The Pound Japanese Yen (GBP/JPY) exchange rate steadied today and is currently trading around JP¥136.799 on the interbank market.
The Japanese Yen (JPY) remained flat against the Pound (GBP) following the publication of the Japanese Leading Economic Index figures for April, which rose against the forecast 95.5 to 95.9, buoying market confidence.
These were followed by the Japanese Coincident Index for April, which also rose above consensus at 102.1.
Many JPY traders are focusing on the meeting between Chinese President Xi Jinping and his US counterpart, Donald Trump, this week, with the important G20 summit due to take place in Osaka.
The trade war between the two superpowers is providing a drag on the Japanese economy – which works closely with both China and the US – and hopes are rising that these tensions could ease this week.
Bi Jiyao, a researcher with the National Development and Reform Commission, commented:
‘To talk is always better than not talking. At least it shows we have the willingness to solve the trade dispute.’
GBP/JPY Exchange Rate Flat as Boris Johnson Leadership Race Heats Up
The Pound, meanwhile, has remained generally subdued against many of its competitors today, with no UK economic data.
Sterling, instead, has been driven by political developments surrounding the ongoing Tory leadership race.
Boris Johnson has come under increasing pressure from Foreign Secretary Jeremy Hunt, with accusation that Mr Johnson’s campaign shows a lack of engagement, and is often avoiding media scrutiny.
Jeremy Hunt also commented:
‘You can’t become prime minister without answering questions about the decisions you’re going to have to take almost immediately you get through the door of No 10. My worry is that Boris has got a coalition of people like Matt Hancock, who want no deal taken off the table, and Mark Francois, who wants no deal – that coalition will dissolve very, very quickly indeed when he has to take some actual decisions.’
Brexit fears are holding back the Pound’s gains today, with the leadership race effectively eclipsing any definitive debates on the UK’s future relationship with the EU.
However, with Boris Johnson remaining a favourite to succeed as the next Prime Minister of Britain, his hard-Brexiter status is causing some concern for Pound investors who want to avoid a Brexit no-deal.
GBP/JPY Outlook: US-China Trade Talks in Focus
Japanese Yen investors are looking ahead to tomorrow’s Bank of Japan Monetary Policy Meeting Minutes report, and with any signs of bullishness, we could see the JPY/GBP exchange rage edge higher.
Tomorrow will also see the printing of the Japanese Corporate Service Price figures for March, which are expected to improve.
Sterling traders, meanwhile, will be awaiting tomorrow’s release of the UK CBI Distributive Trade Survey figures for June.
The Pound Japanese Yen (GBP/JPY) exchange rate will likely be dictated by political developments this week, with JPY benefiting from any signs of a break in the trade war between the US and China.
Comments are closed.