GBP/JPY Exchange Rate Rangebound, Low UK Wages Hold Back British Retail Sales
The Pound Japanese Yen (GBP/JPY) exchange rate held steady today, with the pairing currently trading around ¥139.572 after UK retail sales fell unexpectedly to -0.1% in October.
UK shoppers continue to rein in spending as the UK’s political crisis drags on around Brexit and the 12th December general election. Low income was also perceived to be one of the factors weighing on last month’s retail sales.
Analysts at Reuters commented:
‘Below-target inflation, the strongest rise in wages since 2008 and some of the lowest unemployment rates since the mid-1970s have continued to boost household incomes, although wages are still lower than before the financial crisis once inflation is taken into account.’
After yesterday saw the UK’s October CPI figure fell just short of a three-year low, investors are remaining cautious over rising expectations for the Bank of England (BoE) to cut its interest rates in the near-term.
The Pound (GBP) has remained unmoved against the Japanese Yen (JPY) today, with the UK’s political uncertainty tending to overshadow domestic economic developments.
Japanese Yen (JPY) Fails to Rise on Returning Safe-Haven Appeal
The Japanese Yen (JPY) was unmoved against the Pound (GBP) today despite returning safe-haven appeal as hopes for a partial US-China trade deal fades once again.
According to reports, negotiations between the United States and China have flared-up over farm purchases, with China now being perceived as tilting the “Phase One” trade deal against America.
US President Donald Trump did little to ease tensions between the two superpowers after he threatened to “substantially” hike US tariffs on Chinese goods.
William Reinsch, a Trade Expert at the Centre for Strategic and International Studies, said:
‘We’re in sort of a dangerous moment because both sides feel they have the upper hand, but I don’t think the talks have collapsed.’
With no notable Japanese economic data due out today, the JPY/GBP exchange rate will continue to be driven by global economic and political developments.
GBP/JPY Outlook: Could Improving Japanese Industrial Production Boost the JPY?
Japanese Yen (JPY) investors will be awaiting tomorrow’s release of September’s industrial production figure, which is expected to hold at 1.1%. However, any signs of improvement in the Japanese industrial sector could bolster the JPY/GBP exchange rate.
Sterling traders will be awaiting tomorrow’s release of November’s UK Rightmove House Price Index.
However, the GBP/JPY exchange rate will be driven by the UK’s political developments this week, with any indications that the Tories could consolidate their lead in the polls likely to boost the Pound.