GBP/JPY Exchange Rate Sinks as Japanese Yen Traders Await Stocks Figures
The Pound Japanese Yen (GBP/JPY) exchange rate fell today and is currently trading around ¥145.9430.
The Japanese Yen has gained against the Pound despite the announcement from the Diet (Japanese Parliament) that there would be a record-breaking 101.46 trillion yen budget for this financial year in an attempt to encourage the economy following an imminent consumption tax hike.
Yoshihide Suga, the Japanese Chief Cabinet Secretary, commented:
‘As I have said before, the sales tax will rise to 10 percent in October as stipulated by the law, unless an incident on the scale of the Lehman shock occurs.’
Today, meanwhile, will see the release of the figures for the investment in Japanese stocks for March, and with any signs of an increase this could buoy the Japanese Yen.
Sterling, however, has benefited against many of its competitors ahead of tonight’s vote following the Labour leader, Jeremy Corbyn, rallying his MPs to vote for a ‘confirmatory public vote’ option this evening, an amendment put forward by the Labour MP, Margaret Beckett.
With fears of a no-deal Brexit sliding after the European Research Group, along with Jacob Rees-Mogg and Boris Johnson, have effectively backed voting in favour of Prime Minister Theresa May’s deal in light of the alternative options.
Rees-Mogg said on his ConservativeHome podcast:
‘I have always thought that no deal is better than Mrs May’s deal, but Mrs May’s deal is better than not leaving at all.’
JPY/GBP Exchange Rate Rises despite Gloomy Global Economic Forecasts
The Japanese Yen gained on Sterling today despite yesterday’s survey which revealed that a quarter of Japanese business leaders expect that the global economy will become worsen within six months. While 91.7% thought the world’s second-largest economy, China, would continue to struggle.
Shoei Yamana, President at Konica Minolta, commented:
‘On top of the Chinese economic slowdown, the sense of economic and political uncertainty in Europe, among other factors, will contribute to downward economic pressure.’
These problems have continued to weigh on the Japanese Yen today, clipping some of its gains against the Pound.
GBP/JPY Exchange Rate Sinks as UK’s Distributive Trade Survey Plummets
Today saw the publication of the UK’s CBI distributive trade survey figures for March which plummeted by -18%.
Anna Leach, the head of Economic Intelligence at CBI, said:
‘Even accounting for Easter timing, the High Street’s poor run continues. While real wage growth is picking up, consumer confidence has been hit by escalating uncertainty over Brexit and concern over the economy’s future.’
Brexit news, however, has overshadowed economic data today, with the Sterling benefiting from indications that the Brexit deadlock could be broken by this evening’s crucial vote.
GBP/JPY Forecast: Sterling Could Rise on Increased Support for May’s Brexit Deal
Japanese Yen traders are awaiting tomorrow’s publication of the Tokyo CPI excluding fresh food figures for March, which are expected to remain steady at 1.1%.
These will be followed by the Japanese unemployment rate figures, and with any signs of improvement this could see JPY rise further against Sterling.
Sterling traders, however, will be looking further ahead to Friday for the UK GfK Consumer Confidence figures for March.
The GBP/JPY exchange rate will be dictated by the outcome of this evening’s parliamentary vote, and with any indications that Theresa May’s deal may succeed in a third ‘meaningful vote’ – or a possible delay to Article 50 – could benefit the Pound.