Pound to Yen Exchange Rate Today: GBP/JPY Holds Decline Despite Japanese Retail Report

May 29, 2014 - Written by Toni Johnson

STORY LINK Pound to Yen Exchange Rate Today: GBP/JPY Holds Decline Despite Japanese Retail Report

The Pound to Yen exchange rate held its modest 0.15 per cent decline as European trading progressed on Thursday. The Pound Sterling to Japanese Yen exchange rate is trading down -0.17% at 169.73633 GBP/JPY.

Pound Sterling was broadly softer as a result of bets that the asset’s recent rally was excessive.

The currency also came under pressure yesterday following a slightly disappointing UK CBI reported sales figure. While the Confederation of British Industry’s report showed sales growth, the gauge dropped from +30 to +16 rather than rising to +35 as expected.

The British currency has been riding high over the last few weeks as a result of speculation surrounding the prospect of a Bank of England interest rate increase, but investors are beginning to believe that a wave of optimistic UK data may have led to Sterling being overbought.

During Australasian trading the Yen continued trending higher against the Pound even after Japan’s retail trade report fell short of forecasts.

Retail sales in the nation fell by a seasonally adjusted 13.7 per cent in April, month-on-month, as residents responded to Japan’s first tax increase for 17-years.

A monthly decline of -11.7 per cent had been expected.

This followed a positively revised increase of 6.4 per cent in March.

On the year sales were down 4.4 per cent, considerably more than the 3.3 per cent annual drop forecast.

According to Market New International (MNI); ‘Government and Bank of Japan officials have said the drop in demand after the tax hike has been within forecasts based on anecdotal evidence and interviews with firms. The focus is on whether an expected fall in spending in ay will be slower than in April and whether retail sales will show any sign of rebounding in the coming months on expectations for higher mid-year bonuses’.

The Yen remained higher against several of its peers, achieving an eight-day high against the Euro and a one-week high against the Australian Dollar, as a decline in US Treasury yields increased demand for the safe-haven asset.

The Pound meanwhile consolidated declines as the UK’s Lloyds business barometer dropped. The gauge slid from 66 to 41 in May. Additional movement in the GBP/JPY pairing may be limited in the hours ahead, although the US GDP data will cause some market movement.

Tomorrow’s Japanese inflation data could spark Yen fluctuations.

As it stands the GBP/JPY exchange rate is trading in the region of 101.5200

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