Over the past week, the Pound Sterling to Japanese Yen (GBP/JPY) exchange rate was trending within the range of 193.9500 to 194.7400.
Despite dampened market sentiment causing heightened demand for safe-haven assets, the Japanese Yen has generally softened over the past week. The main reason behind the lack of demand for the Yen is fears that China’s economic slowdown and rapidly declining Yuan will have a negative impact on Japanese exports. In addition to difficulties in China weighing on the Yen, many Bank of Japan (BoJ) officials have indicated that inflation is a concern with uncertainty as to the timing of achieving the 2% target set out by the central bank.
The British Pound fluctuated considerably over the past week with domestic data producing varied results. The latest labour market figures, which saw unemployment rise for the second consecutive month, have stoked fears that the Bank of England (BoE) will delay a benchmark rate hike well into 2016.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate edged higher by around 0.3% during Thursday’s European session.
Despite the fact that damp market sentiment, in response to turmoil in China and tanking commodity prices, has seen increased demand for safe-haven assets, the Japanese Yen declined versus many of its rivals on Thursday. The depreciation can be linked to June’s domestic Machine Orders which saw an annual increase of 16.6%; well below the median market forecast 17.6% gain. Ongoing fears regarding the impact of China’s slowdown on Japanese exports has also overshadowed demand for the Yen’s safe-haven properties.
Conversely, the Pound edged higher during Thursday’s European session after the RICS House Price Balance bettered the market projection. The Sterling uptrend was initiated by concerns that Wednesday’s depreciation was overdone given that the labour market data still indicated accelerated wage growth.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trending in the region of 194.5300.
Looking ahead, there is the potential for GBP/JPY volatility on Friday with British Construction Output data due for publication. However, the pairing is more likely to see movement as a result of market sentiment rather than data results. Monday of next week will be of significance to those invested in the Yen with Japanese second-quarter Gross Domestic Product due for release.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate climbed to a high of 194.7400 during Thursday’s European session.