GBP/JPY Exchange Rate Firms on UK House Price Data
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is trading narrowly this morning, following the release of some stronger-than-expected UK housing data.
At the time of writing the GBP/JPY exchange rate is at ¥144.18 on the interbank rate, which is close to today’s opening levels but leaves the pairing sitting close to a two-month low.
Pound Sterling (GBP) Exchange Rate Holds Steady as House Price Growth Surges
Following on from Monday’s Brexit related losses, the Pound (GBP) appears to have found some solid ground this morning following the release of the UK’s latest housing data.
According to Halifax, annual house price growth jumped from 1.8% to 3.3% in July, sailing past expectations that prices would only rise 2.7%, meaning house prices are accelerating at their fastest pace since November.
— Halifax Bank News (@HalifaxBankNews) August 7, 2018
The jump in prices coincides with an upswing in wages in recent months, alleviating some of the pressure on household finances and helping to stimulate growth.
However some analysts warn about reading too much into the results, suggesting that the UK housing market remains soft despite last month’s data.
Jonathan Samuels, chief executive of property lender, Octane Capital, said:
‘The annual rate of growth may have shot up between June and July but weak supply rather than robust demand is the primary driver.
‘The market might look punchy on the outside but it’s pallid on the inside. Transaction levels overall are low and it’s hard to see them picking up materially in the months ahead as Brexit uncertainty heightens.’
Japanese Yen to Pound (JPY/GBP) Exchange Rate Stable Following Upbeat Wage Growth Figures
At the same time the Japanese Yen (JPY) is holding steady this morning in the wake of Japan’s stronger-than-expected wage growth figures.
Today’s data revealed year-on-year cash earnings struck 3.6% in June, surging up from 2.1% in the previous reading and easily outpacing forecasts of a slide to 1.7%.
However, despite the stellar wage growth the reaction of the Japanese Yen has been rather muted, with analysts not expecting the data to alter the Bank of Japan’s (BoJ) policy outlook as it remains focused on a deceleration in growth and inflation.
GBP/JPY Exchange Rate Forecast: UK GDP Figures in Focus, Could Strong GDP Growth Prompt Sterling Rally?
Looking ahead to later in the week, the Pound Japanese Yen (GBP/JPY) exchange rate could rally with the release of the UK’s latest GDP figures.
Economists forecast that Friday’s data will show that the UK economy grew by 0.4% in the second quarter, rebounding from a subdued 0.2% expansion at the start of the year.
Any rise in the GBP exchange rate may also be aided by the release of the UK’s industrial production figures, with factory output expected to have jumped from -0.4% to 0.4% in June.
Meanwhile Japan will also publish its latest GDP figures on Friday, with the Japanese Yen poised to advance if Japan’s economy shows growth in the second quarter and avoids entering a technical recession.