Pound Japanese Yen Exchange Rate Sinks as Japanese Exports Rise at their Strongest Rate Since 2017

GBP/JPY Exchange Rate Falls as Japanese Exports Rebound

The Pound Japanese Yen (GBP/JPY) exchange rate fell today after JPY received a boost from the latest Japanese exports data. Exports reportedly grew at their strongest rate since late 2017. The pairing is currently fluctuating around ¥150.28.

As a result, the Japanese Yen has benefited from growing confidence in the Japanese economy, which is one of the strongest in the world, alongside America and China.

Tom Learmouth, Japan economist at Capital Economics, was more cautious about the data, however, saying:

‘The rebound in exports slowed significantly across Q1 and external demand is unlikely to provide much of a tailwind to growth this year.

‘The impressive annual figure was down to base effects from the weakness in exports in March 2020.’

Global trade recovery has however contributed to Japan’s economic recovery, increasing demand for the Japanese Yen.

Takeshi Minami, chief economist at Norinchukin Research Institute, warned about US-China trade tensions:

‘Most exports to China aren’t very hi-tech, and there’s the possibility there will be restrictions amid rising US-China tensions.’

Pound (GBP) Struggles Despite Growing Confidence in UK Economy

The Pound (GBP) struggled today despite growing confidence in the UK. British Covid-19 hospitalisations and deaths continue to remain relatively low following the Government’s loosening of lockdown restrictions.

UK house prices have also surged with Rightmove saying that the asking price rose by 2.1% this month.

Tim Bannister, Rightmove’s director of property data, commented:

‘The stars have aligned for this spring price surge, with buyers’ new space requirements being part of the constellation alongside cheap mortgages, stamp duty holiday extensions in England and Wales, government support for 95% mortgages and a shortage of suitable property to buy.’

In absence of any UK economic data today, however, the Pound Japanese Yen (GBP/JPY) exchange rate has struggled.

Today saw encouraging news for the UK economy, however, in the form of reports that hiring had restarted following the easing of lockdown restrictions last week.

Analysts at Bloomberg said:

‘The U.K. economy is building momentum, with real-time indicators suggesting consumers have started to splurge some of the cash they’ve saved now that the government has loosened lockdown rules.’

GBP/JPY Exchange Rare Forecast: Could Sterling Fall as UK Unemployment Increases?

Japanese Yen (JPY) traders will be awaiting tomorrow’s release of the latest Japanese Tertiary Industry Index for February.

Any further improvement in the outlook for the Japanese industrial sector would be JPY-positive.

Pound (GBP) investors will be awaiting the release of the UK ILO Unemployment Rate for February.

If UK joblessness rises, however, then we could see the Pound Japanese Yen exchange rate suffer.

David Moore

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