The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate recorded gains during Wednesday’s European trading in a quiet data-day for both nations.
The Pound Sterling exchange rate suffered losses earlier in the week as Markit’s UK Purchasing Managers Indexes (PMI) failed to meet forecasts. However, Tuesday’s Japanese Services and Composite measures rose favourably.
The Japanese service sector increased from 50.6 to 51.7 in December, climbing further above the 50.0 benchmark which separates expansion from contraction.
Markit Economist Amy Brownbill commented: ‘Business activity at Japanese services companies remained in growth territory in December, contrasting with a marginal fall in new orders for the first time in seven months. Despite subdued demand conditions, employment growth was recorded in the Japanese service sector, although at a weak rate.’
Furthermore, sentiment in the nation has also increased after a period of weaker confidence.
Brownbill continued: ‘Meanwhile expectations regarding activity over the next 12 months improved in December, thereby suggesting a positive outlook for activity over the coming year.’
The Yen has fallen against other majors such as the US Dollar (JPY/USD) after a period of safe-haven asset seeking.
Currency analyst Kumiko Ishikawa stated: ‘Equity declines have moderated in Tokyo trading. While the drop in stocks and oil could be seen as a bit overdone, there’s still a strong sense of risk aversion in the market. The Yen is weakening now, but I don’t expect it will suddenly drop back to 120 per Dollar.’
Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate Forecast
The US Dollar has also placed pressure on the Pound (USD/GBP) as the US economy appears to be closer to hiking interest rates than the UK.
The Bank of England (BoE) will be releasing its most recent interest rate decision on Thursday—an event that has caused significant Pound Sterling movement in the past.
Thursday will also see the release of Tokyo Average Office Vacancies and Japanese Official Reserve Assets figures.
Friday could be a more interesting day for Pound Sterling to Japanese Yen (GBP/JPY) trading when the Japanese Coincident Index and Leading Indexes surface. In addition, UK Industrial Production, Manufacturing Production and Trade Balance ecostats will be released.
Any further weak UK figures could pressure the Pound Sterling (GBP) exchange rate lower.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is presently trending in the region of 180.1900, registering market movement of +0.35%.
