The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate edged higher by around 0.12% on Wednesday morning.
As traders await minutes for the most recent Bank of England (BoE) policy meeting, the Pound is generally holding steady versus most of it major peers. There is, however, a high possibility that the Pound will trend lower over the course of the European session with the weight of the general election stymieing investor confidence.
The Japanese Yen, meanwhile, softened versus many of its most traded currency competitors despite registering positive results in domestic data. The declination is as a result of speculation that the Bank of Japan (BOJ) will cut its inflation outlook for the current fiscal year.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trending in the region of 178.6100.
Yesterday…
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate ticked higher by around 0.11% on Tuesday morning.
With a complete absence of domestic data to provoke volatility, the Pound is holding relatively steady versus the majority of its peers with any movement being the result of changes in the currency market. A slight declination can be attributed to continued concern regarding a massive policy overhaul as we approach the general election.
The Japanese Yen, meanwhile, softened versus the majority of its most traded currency competitors after domestic data produced mixed results. The depreciation was slowed, somewhat, thanks to demand for safe-haven assets amid geopolitical upheaval in Europe.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trending in the region of 177.8000.
Pound Sterling (GBP) Exchange Rate Edges Lower on General Election Concerns
With just 16 days until its conclusion, the general election is weighing on the Pound. Given that opinion polls are showing vastly different results, with none giving any clear indication of a majority leader, it is perhaps unsurprising that few traders are investing heavily. The potential for a hung parliament is of concern because no one would know who will balance the power and how that will change policy.
Analyst Edward Knox stated; ‘The lead up to the election will be characterised by increasing anxiety and uncertainty. Even after the result, the potential for an unstable government following such a close race could continue to impact Sterling in the days and weeks after until an effective solution is found.’
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate dropped to a low today of 177.4600.
Japanese Yen (JPY) Exchange Rate Softens on Mixed Data
Japanese data produced mixed results on Tuesday which caused the Yen to decline versus many of its most traded currency competitors. The Coincident Index ticked higher from 110.5 to 110.7, but the Leading Index dropped from 105.3 to 104.8. March’s Supermarket Sales declined by -8.6% on the year, Nationwide Department Store Sales declined by -19.7% in March on the year, and Tokyo Department Store Sales cooled by -16.5% in March on the year.
The declination was slowed, however, thanks to demand for safe-haven assets amid geopolitical tensions in Greece. With the cash-strapped nation looking increasingly likely to exit the Eurozone, trader risk-appetite has cooled significantly.
Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate Forecast to Trend within Narrow Range
Given the lack of domestic data to provoke changes, and with the UK general election weighing on Sterling investment, the Pound to Japanese Yen (GBP/JPY) exchange rate is likely to trend within a tight range for the remainder of Tuesday’s European session.
Wednesday should see heightened GBP/JPY volatility with Japanese trade balance data and Bank of England (BoE) minutes due for publication.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate climbed to a high of 178.1700.
