Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate – Yen softens as emerging market worries ease slightly

Pound to Japanese Yen exchange rate chart

The Japanese Yen was higher against the Pound and close to a two-month high against the US Dollar on Tuesday as the currency remained supported from demand for safe haven assets.

Overnight Asian equities tumbled and concerns over a slowdown in the global economy bolstered demand for the safe haven Yen. Recent turmoil in emerging markets and the release of data out of both the USA and China which hinted at a slowing of the world’s top two economy’s has also seen investors seek safety.

The Yen climbed overnight after the Japanese Nikkei posted its largest one-day decline since June. It fell by 4.2% and followed Monday’s weak US manufacturing data. Both reinforced negative investor sentiment.

As Tuesday’s session progressed the US Dollar was able to ease away from a two-month low and the Pound was able to push higher. Turmoil in emerging markets eased slightly causing investors to increase their demand for riskier and higher yielding assets.

The Pound was able to push higher against the Japanese Yen and other peers including the Euro and US Dollar on Tuesday after a report showed that construction activity in the UK expanded to its highest level since 2007. The Markit/CIPS construction PMI climbed to 64.6 in January, up from December’s level of 62.1, the biggest expansion seen since the financial crisis.

The Euro fell against the Yen earlier in the session after data out of Spain showed that the number of people out of work in the struggling country rose. The number of people out of work increased by a seasonally adjusted figure of 113,100 last month, far off economist expectations for a decline of 21,000. The data also reversed the positive figure seen in December as staff hired for the Christmas holidays was laid off.

The Yen is likely to continue to find support as the concerns over emerging markets continue.