Pound to Japanese Yen (GBP/JPY) Exchange Rate News – Yen Fluctuates after World Bank GDP Revisions

Pound to Japanese Yen exchange rate chart

The Yen’s bearish relationship with several of its major currency peers continued yesterday with the asset edging lower against the Pound and extending declines against the US Dollar.

With the Pound supported by a report revealing that UK inflation finally slowed to the Bank of England’s 2 per cent target the Yen hit a low of 171.7800.

Meanwhile, better-than-forecast US retail sales data increased the odds of the Federal Reserve tapering stimulus when it meets later this month and helped the ‘Greenback’ advance on its Japanese counterpart.

The appeal of the safe-haven Yen was also lowered as investors turned to higher-risk assets in response to the World Bank increasing its global growth forecasts.

The World Bank now sees global economic expansion of 3.2 per cent in 2014, up from a prior estimate of 3 per cent, with the wealthiest countries enjoying expansion of 2.2 per cent.

The decision was a reflection of the Eurozone’s return to growth and the economic stabilisation seen in the US.

In its report the World Bank stated; ‘This strengthening of output among high-income countries marks a significant shift from recent years when developing countries alone pulled the global economy forward. [Import demand] should help compensate for the inevitable tightening of global financial conditions that will arise as monetary policy in high-income economies is normalised.’
However, during European trading the Yen recovered some losses against the Pound as the British currency came under pressure before BoE Governor Mark Carney delivered a financial stability testimony to UK lawmakers.

A strong surge in Japan’s machine tool orders also lent the Yen support. Orders increased by 28.0 in December year-on-year, following an increase of 15.4 per cent in November.

Today’s Japanese tertiary industry index could be responsible for additional Yen movement.