Pound Japanese Yen (GBP/JPY) Exchange Rate Rises as US-China Trade Talks Announced
The Pound Sterling Japanese Yen (GBP/JPY) exchange rate rose today by around 0.6%, with the pairing currently trading at ¥130.9850.
A decline in the Japanese currency comes as investors abandon safe haven currencies in favour of riskier assets.
On Thursday, China’s Commerce Ministry confirmed that high-level talks between the US and China would take place in October.
The Ministry stated:
‘Both side agreed that they should work together and take practical actions to create good conditions for consultations.’
Speaking to reporters, Ministry Spokesman, Gao Feng said that Beijing opposes escalation of tensions and will try to make ‘real progress’ during in-person talks.
Hong Kong leader, Carrie Lam further increased investor risk appetite by withdrawing the extradition bill responsible for igniting mass protests across the province, though protestors have vowed to stay on the streets despite the concession.
Sterling (GBP) Buoyed by Brexit Delay Bill
Reports that the UK could avoid crashing out of the EU on 31 October provided a boost to Sterling this week. The news follows a parliamentary vote in favour of Labour MP Hilary Benn’s bill to delay Brexit.
The bill will be put to the House of Lords for approval on Friday and, if passed will mean the UK’s exit from the EU could be delayed by three months unless a deal is agreed upon by 19 October. However, this will be dependent on a unanimous agreement by EU leaders to grant the extension.
Prime Minister Boris Johnson denounced the bill, arguing it will leave him incapable of negotiating with the EU.
MPs have also rejected Johnson’s call for an October general election, with Labour leader Jeremy Corbyn refusing to consider the idea until no-deal is ‘taken off the table’.
BoJ Kataoka: Central Bank Needs to Expand Stimulus
Bank of japan (BoJ) board member Goushi Kataoka triggered a slump in the Japanese Yen on Wednesday by suggesting the central bank should expand its stimulus measures in response to global economic risks.
Speaking at a news conference, Kataoka said:
‘Personally, I feel the need for additional easing is heightening. On the other hand, many central banks are ramping up stimulus, which could affect the global economy.’
Pound Japanese Yen Outlook: Will Disappointing Japanese Household Spending Send JPY Lower?
Looking ahead to the end of the week, UK politics look set to drive Pound movement with any Brexit developments likely to be a catalyst for change in the GBP/JPY exchange rate.
If July’s annual household spending does not rise as high as forecast the Pound Japanese Yen (GBP/JPY) exchange rate could rally.