GBP/JPY Exchange Rate Eases, Japanese Yen Rises on Increased Safe-Haven Appeal
The Pound Japanese Yen (GBP/JPY) exchange rate eased today, with the pairing currently trading around ¥139.950 due to the rising safe-haven appeal of JPY amid heightened US-China trade tensions and increasing political unrest in Hong Kong.
The Japanese Yen (JPY) also rose following the US Senate unanimous decision to pass legislation to back human rights in Hong Kong, which further escalated tensions between the US and China with Beijing quickly condemning Washington’s perceived interference in Chinese affairs.
Stephen Innes, an Analyst at AxiTrader, commented:
‘Now that the ‘HK bill’ has passed by an overwhelming majority in the Senate, it will be difficult for the White House to hold out against this bipartisan pressure, which could to put another snag in the trade talk lines.’
Meanwhile, last night’s release of October’s Japanese Merchandise Trade Balance Total, which fell below forecasts to ¥17.3 billion, and clipped some of the Japanese Yen’s gains against the Sterling on rising concerns for the Japanese economy.
Today will see the release of the Japanese Foreign Investment figures for November, with any signs of improvement likely providing more uplift for the Japanese Yen.
GBP/JPY Exchange Rate Subdued After UK Election Debate Deadlock
The Pound (GBP) is subdued against the Japanese Yen (JPY) today following last night’s UK election debate between Prime Minister Boris Johnson and Labour leader Jeremy Corbyn, which failed to show any clear winner.
While YouGov’s poll showed a modest majority for Johnson – at 51% to 49% – the Conservative’s failed to further consolidate their lead on the Labour Party, leaving UK markets uncertain on which direction the 12th December general election will go.
Piotr Matys, a Currency Strategist at Rabobank, London, commented:
‘The debate was not a game changer for Sterling. The market reaction would have been stronger if Jeremy Corbyn had gained an advantage in the polls but that doesn’t appear to have been the case.’
With no UK economic data due out today, UK political will remain in focus and could potentially provide more volatility for the Pound.
GBP/JPY Outlook: Could Improving Japanese Inflation Further Boost JPY?
Japanese Yen (JPY) investors will be looking ahead to tomorrow’s release of October’s Japanese inflation data. Any signs of improvement could further buoy the JPY/GBP exchange rate as this would boost confidence in Japan’s economy.
Tomorrow will also see the release of September’s Japanese All Industry Activity Index for September, which is expected to ease from 0% to -0.2%.
Pound (GBP) traders, meanwhile, will be awaiting tomorrow’s publication of October’s UK Public Sector Net Borrowing figure, which could further weigh on the GBP/JPY exchange rate if it sinks further into deficit territory.
The GBP/JPY exchange rate will remain volatile this week, with UK political uncertainties beginning to rise ahead of the December election and US-China trade uncertainty continuing to boost safe-haven appeal in Japanese Yen.