Over the past seven days the Pound Sterling to Japanese Yen (GBP/JPY) exchange rate has been trending widely between 182.2905 and 185.2589.
The GBP/JPY exchange rate was volatile during last week, with trading on Wednesday seeing negative economic sentiment survey results from Japan and mixed UK production and housing market data. The Japan Eco Watchers Survey, which measures the opinion of ‘the man on the street’ from workers in areas likely to be affected by changes in the business cycle, found that pessimism in the current situation increased, with the index dropping further below the positive 50 mark to 46.1 and the outlook survey dropping to 48.2. While UK industrial production was up year-on-year (YoY) to 1.7%, manufacturing production still declined by 0.1%.
A large amount of Japanese data was released during Sunday’s Tokyo session and demonstrated that the current and future outlook for Japanese industry was positive. The Tankan All Big Industry index dropped -0.1% to 10.8%, with the Large Manufacturers Index holding steady at 12 and the Non-Manufacturing Index also remaining level at 25. The outlook for non-manufacturing dipped only slightly, down to 18 from 19, while the Large Manufacturing Outlook dropped from 10 to 7. Overall the news was mostly better than feared and so the GBP/JPY exchange rate fell from 184.3033 at the beginning of Monday’s London session to 182.2328 at the end of the session, with no UK data to provide resistance.
Pound Sterling is currently sliding against the Japanese Yen today after figures showed that UK Average Weekly Earnings growth has fallen further than expected, undercutting the drop from 3.0% to 2.5% by -0.1% year-on-year (YoY). Excluding bonuses, weekly earnings increased 2.0%, below the 2.3% forecast. The only Japanese data released this morning during the Toyko session was the Nikkei PMI for Manufacturing, which saw only a -0.1 drop to 52.5 and the Machine Tool Orders, which posted a mild slowdown in the rate of contraction to -17.7%.
The Pound Sterling to Japanese Yen exchange rate was trending in the region of 182.8600 during Wednesday’s European session.
For the rest of the week the Japanese Yen could feel the fallout from the US Federal Reserve’s interest rate decision, which is likely to spark volatility across the board. Domestically, bond buying, foreign stock values and merchandise trade balance figures are released during today’s Toyko session, with Friday’s session seeing the release of the Monetary Policy Statement from the Bank of Japan (BoJ). The UK has no data due out on Friday, but tomorrow will see the release of Retail Sales figures and statistics from the Confederation of Business Industry (CBI).