As the European session got underway some less-than-impressive UK public borrowing figures saw the Pound soften slightly against the Yen, although the British currency’s decline was limited as investors look ahead to Friday’s second quarter GDP figures, which are expected to show that the UK economy expanded by twice as much in Q2 as it did in Q1.
The Japanese Yen exchange rate was in the region of 152.8450 Yen to one British Pound as of 10:00 am GMT
Meanwhile, the Yen was also coming under pressure from the ‘Greenback’ as traders turned from the Asian asset ahead of today’s big US news.
Overnight the Yen posted its most significant decline against the US Dollar for a week, softening against its safe-haven rival as Fed tapering speculation reaches fever pitch.
After the minutes from the Federal Open Market Committee’s July meeting are published at 19:00 today investors may finally have a firmer idea of whether the central bank intends to begin tapering stimulus in September.
If it seems that asset purchases will indeed be reduced from next month the US Dollar will be boosted and the Yen could see further declines.
The GBP/JPY exchange rate hit a low of 151.9420
As currency economist Peter Dragicevich comments: ‘The minutes could refocus market attention back on the prospect of Fed tapering. That could see the US Dollar rebound over the next few days.’
Similarly, a New York-based strategist observed: ‘Market participants will be looking for some clarity and a possible timeline on the quantitative easing tapering plans. This should offer support to the US Dollar, although the risk to that view is that the minutes include the discussion of new rate tightening guidance, including a lower unemployment rate threshold.’
While US developments could prove to be a significant cause of market volatility, tomorrow’s Japanese foreign bond buying figures and machine tool orders report could also be responsible for additional Yen movement.
Current Japanese Yen (JPY) Exchange Rates:
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 97.5000 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 152.8450 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 130.5620 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 77.0547 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 87.9016 <
(Correct as of 10:00 GMT)
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