GBP/JPY Exchange Rate Flat Following UK Job Figures
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is holding steady this morning as markets react to the UK’s latest labour report.
At the time of writing the GBP/JPY exchange rate is virtually unchanged, leaving the pairing trading at around ¥146.32.
Pound (GBP) Stable as UK Wage Growth in Line With Expectations
The Pound (GBP) is trading sideways against the Japanese (Yen) and the majority of its other peers this morning as markets digest the UK’s latest labour figures.
According to data published by the Office for National Statistics (ONS), UK unemployment held at a 44-year low of 3.9% in February, as employment hit a record high of 76.1%.
For December 2018 to February 2019, 76.1% of people aged 16 to 64 were in paid work – the joint-highest employment rate on record https://t.co/kAGkREZmA3 pic.twitter.com/jJcfYo8BRM
— Office for National Statistics (ONS) (@ONS) April 16, 2019
The accompanying earnings figures meanwhile showed that wage growth held at a decade-high of 3.5% in February after being revised up in January.
However while the data was solid, it failed to spark any excitement amongst GBP investors, with Sterling barely responding to the release.
This is likely party due to an unexpected jump in UK claimants in March as well as lingering Brexit concerns as cross-party talks between the Conservatives and Labour are still to offer a breakthrough to end the Brexit deadlock in Parliament.
Japanese Yen (JPY) Muted Following BoJ Kuroda Comments
At the same time, the Japanese Yen (JPY) is struggling to find momentum this morning in the wake of remarks from Bank of Japan (BoJ) Governor Haruhiko Kuroda.
Speaking in Japan’s Parliament overnight Kuroda reiterated the bank’s dovish stance as he vowed that it would ‘patiently continue’ its extensive monetary stimulus programme as it targets an inflation rate of 2%.
This followed comments earlier in the week in which Kuroda hinted the BoJ may be prepared to implement further stimulus, as he warned that weak exports to China had ‘slightly slowed’ the Japanese economy.
Stubbornly low inflation has been a thorn in the side of the BoJ for some time now, with price growth remaining subdued despite a strong labour market.
GBP/JPY Exchange Rate Forecast: Rising Inflation to Boost Sterling?
Looking ahead, the main catalyst of movement in the Pound Japanese Yen (GBP/JPY) exchange rate tomorrow looks likely to be the release of the UK’s latest Consumer Price Index.
This may see Sterling tick higher as economists forecast that UK inflation will have risen from 1.9% to 2% in March, putting it back within the Bank of England’s (BoE) target range for the first time this year.
While the BoE currently remains paralysed by Brexit uncertainty, the uptick in inflation may help to leave the door open to a rate hike later in the year if a deal is found in a timely manner.
In the meantime, the Yen may come under fire later tonight as Japan publishes its latest trade figures.
While Japan’s trade surplus is expected to have expanded in March, the data is also forecast to show that exports continued to contract, likely denting JPY exchange rates as it adds to concerns over further monetary easing from the BoJ.