GBP/JPY Exchange Rate Accelerates on Talks of US-China Trade Truce
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate maintains its upward momentum going into Thursday’s session as US-China trade optimism limits demand for safe-haven currencies such as the Yen.
At the time of writing, the GBP/JPY exchange rate has climbing roughly 0.3% so far today, propelling the pairing to a two-week high.
Japanese Yen (JPY) Dented by Improved Risk-Appetite
The Japanese Yen (JPY) continues to retreat against the Pound (GBP) and the majority of its other peers this morning as the Yen’s safe-haven status is undermined by renewed US-China trade optimism.
Ahead of the upcoming G20 Summit of Leaders, the South China Morning Post reported on a tentative trade truce agreement between the US and China.
This follows hot on the heels of comments from US Treasury Secretary, Steven Mnuchin on Wednesday as he suggested a US-China trade agreement was 90% complete.
The resulting trade optimism has triggered a notable upswing in global risk sentiment, something which drove broad losses in the Yen as safe-haven positions where shortened.
This offset the release of some stronger-than-expected Japanese data published overnight, with a surprise upswing in domestic retail sales in May having only provided temporary relief for the Yen.
Mixed Brexit Messages from Tory Leadership Candidates Limit Upside in the Pound (GBP)
Meanwhile, the upswing in Pound (GBP) looks to be running out of steam as its rise is undermined by rising Brexit uncertainty.
Fueling this uncertainty are some contradictory messages on Brexit from Conservative leadership hopeful Boris Johnson.
This comes as the leadership frontrunner assures Brexit supporting Tories that the leaving the EU in October is ‘do or die’ whilst simultaneously claiming that a no-deal Brexit is unlikely.
However given Johnson’s rejection of Theresa May’s withdrawal deal and the EU’s apparent refusal to renegotiate is unclear what sort of deal Johnson hopes to achieve.
Unsurprisingly GBP investors aren’t entirely convinced by Johnson’s claims, with the resulting uncertainty limiting the appeal of Sterling.
GBP/JPY Exchange Rate Forecast: Robust Japanese Data to Fuel Yen Rally?
Looking ahead, the Pound Japanese Yen (GBP/JPY) exchange rate may find itself forced to relinquish ground later tonight as Japan is expected to publish some robust employment figures, showing that unemployment held at 2.4% in May.
This will be accomplice by the release of Japan’s latest industrial production figures, with economists forecasting that production growth will have accelerated from 0.6% to 0.7% last month.
Meanwhile, the Pound may find some support tomorrow morning as the UK’s final GDP release for the first quarter is expected to confirm that the UK’s economy expanded by a healthy 0.5% at the start of 2018.
These will be accompanied by Nationwide’s latest house price figures, which are forecast to show that prices accelerated again this month after slowing in May.