Over the past week, the Pound Sterling to Japanese Yen (GBP/JPY) exchange rate was trending within the range of 191.0829 to 193.9474.
Since Greek MPs voted to accept the terms for unlocking a third-bailout deal from the troika of creditors, allaying fears of a forced Greek exit from the Eurozone, market sentiment has improved significantly. This caused the safe-haven Japanese Yen to depreciate versus many of its currency rivals. In addition, disappointing trade data fuelled the Yen’s downtrend. Whilst Japanese exports strengthened by 9.5% in June, narrowly missing the median market forecast 10%, June’s Imports slumped less-than-expected by -2.9%. This resulted in a trade deficit of -69.0 billion Yen despite predictions of a 6.1 billion Yen surplus.
The Pound, meanwhile, fluctuated over the past week thanks to mixed results from domestic data publications. A general depreciation can be linked to fears of Sterling overvaluation and profit taking as Sterling achieved multi-year highs against a number of its rivals. The UK’s broad economic recovery is still making the Pound one of the more sought after investments, however.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate was trending within a limited range on Monday afternoon.
On Monday, the Yen was trending lower versus its major peers in response to cooling demand for safe-haven assets amid optimism regarding Greece’s third bailout package. Additional losses can be attributed to comments issued by the Bank of Japan’s (BOJ) Deputy Governor Hiroshi Nakaso. Nakaso warned that the economic slowdown in China could have a detrimental effect on Japan’s exports. ‘Even if China’s economy maintained its growth rate, the main contribution would be from public investment, so the effect on Asian economies and Japan’s exports warrants due attention,’ Nakaso told business leaders in Kumamoto, southern Japan.
Monday saw the Pound decline versus most of its currency rivals after Bank of England (BoE) Chief Economist Andrew Haldane stated that the bank was in no rush to hike the cash rate. Haldane stated that the British labour market has still not recovered from the financial crash, and that a rate hike could create many issues for British families.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate dropped to a low of 190.9900 during Monday’s European session.
Looking ahead, there are several influential Japanese data publications due out over the coming week with the potential to provoke Yen volatility. Chief amongst these publications will be June’s National Consumer Price Index. In terms of British economic data, the most likely publication to provoke Sterling movement will be Tuesday’s UK Gross Domestic Product figure. It is worth noting that domestic data may not have as much of an impact on GBP/JPY fluctuations with focus instead on market sentiment and central bank officials’ statements.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate climbed to a high of 192.1900 during Monday’s European session.