The Japanese markets are closed until Thursday this week as Japan celebrates the Golden Week Holiday, leaving the Pound Sterling to Japanese Yen (GBP/JPY) exchange rate to trend in a narrow range on Wednesday. The GBP/JPY currency pair has reached session highs of 182.5200 while stooping to lows of 181.4200.
However, Thursday could get more interesting for Japanese Yen trading with the release of Markit’s Japanese Services and Composite Purchasing Managers Indexes (PMI). Both gauges remained below the 50.0 expansion benchmark in March and showed unfavourable contractions.
Friday will be another exciting day for the Japanese Yen exchange rate with the release of the Bank of Japan’s (BoJ) April meeting minutes. The BoJ’s last monetary policy meeting saw the central bank maintain the current level of easing rather than expanding further as some economists had forecast. However, markets will be looking toward a speech by BOJ governor Haruhiko Kuroda on May 15th for any direction on potential adjustments to easing ahead of the May 22nd policy meeting.
The last inflation forecast from the bank read: ‘It is likely to be about 0% for the time being and, as the underlying trend in inflation steadily rises and the effect of the decline in oil prices dissipate, accelerate toward 2% – the price stability target. Although the timing of reaching around 2% depends on developments in crude oil prices, it is projected to be in the first half of fiscal 2016.’
Meanwhile, last week saw some influential Japanese data released, such as Thursday’s Industrial Production stat which improved from -2.0% to -1.2% on the year in March. Thursday also saw an annual 0.7% rise in Japanese Housing Starts in March, rather than the -1.9% forecast.
However, some economists are suggesting the US Dollar to Japanese Yen (USD/JPY) exchange rate could climb higher on strong US data this week, which would reduce demand for the Yen. If Friday’s Change in Non-Farm Payrolls and Unemployment Rate figures print favourably in line with forecasts, the safe-haven Yen may fall against other majors as a US Dollar rally takes place.
The USD/JPY currency pair leapt above the psychological 120.00 barrier last week, with Friday’s session to closing above the benchmark for the first time since early April. A strong labour market report could lead investors to forecast a US Federal Reserve interest rate hike in the near future which could cause the majority of other majors to fall against the US Dollar.
The US Dollar to Japanese Yen (USD/JPY) exchange rate is presently trending in the region of 119.8000.