Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate Near Six-Week Low on Brexit Exports Warning

Warning about Post-Brexit Disruption Drags GBP/JPY Exchange Rate Down

The Pound (GBP) has fallen by -0.3% against the Japanese Yen (JPY) today, with a gloomy prediction about Brexit pushing the GBP/JPY exchange rate lower.

This decline has put the Pound down to its lowest level against the Yen since mid-September.

The National Audit Office (NAO) has been partly responsible for today’s Pound Sterling losses, with NAO analysts predicting serious disruption to UK exporters if Brexit goes badly.

Bringing up past concerns about long queues and lost revenue, the NAO has estimated that a no-deal Brexit will cause delays and difficulties for the UK.

The NAO’s Comptroller and Auditor General, Sir Amyas Morse, has spoken about the potential dangers that a no-deal Brexit entails for UK exporters and border authorities:

‘The government has openly accepted the border will be sub-optimal if there is no [Brexit] deal with the EU on 29 March 2019.

‘What is clear is that businesses and individuals who are reliant on the border running smoothly will pay the price.”

Japanese Yen to Pound (JPY/GBP) Exchange Rate Rises on Higher Manufacturing Activity

The Japanese Yen has been supported today by the Nikkei manufacturing PMI, which has revealed an unexpected rise in sector activity.

The reading has increased from 52.5 points to 53.1, beating forecasts for a 52.6 point printing.

A higher figure indicates increased sector activity and could lead to GDP growth in the future, so this data has raised JPY trader optimism.

Pound to Yen (GBP/JPY) Exchange Rate Forecast: Will Sterling Strengthen on Budget Announcement?

Looking ahead, the next economic data to watch out for will come from Japan in the form of retail sales stats on Monday morning.

These results could push the Pound to Yen (GBP/JPY) exchange rate higher, as they are tipped to show a slower pace of annual sales growth.

The more significant event on Monday will be the delivery of the UK budget, by Chancellor Philip Hammond.

After Prime Minister Theresa May’s claim that ‘austerity is over’, some are calling for Mr Hammond to loosen the purse strings and announce an ambitious spread of spending.

Given the Chancellor’s reputation for caution, however, a spending spree may not be forthcoming.

If Mr Hammond unexpectedly announces widespread spending schemes, then the Pound could rise sharply against the Yen on Monday.

Adam Solomon

Adam joined the team at TorFX soon after graduating from University in 2005 with a degree in Journalism. Since then Adam has advanced to become both Head of Trading and Head of Treasury. His keen interest in the currency market and knowledge of what drives exchange rates makes him perfectly positioned to produce regular market updates focused on the movements of the major currencies.

Contact Adam Solomon