Yen to Pound Exchange Rate Today - JPY/GBP Slightly Higher vs Weakened Sterling

July 24, 2014 - Written by Frank Davies

STORY LINK Yen to Pound Exchange Rate Today - JPY/GBP Slightly Higher vs Weakened Sterling

The Pound firmed slightly against the Japanese Yen on Friday after data showed that Japan’s inflation rate slowed in June as the introduction of a raise in the nation’s sales tax slowed demand. The data showed that the core consumer price index which does not include food goods, advanced by 2.2%, down from May’s level of 3.4%.

The Pound to Yen exchange rate is currently trading at 72.86406 GBP/JPY.

The Japanese Yen edged higher against a broadly weaker Pound on Thursday after UK retail sales data came in below expectations and led to investors paring their bets that the Bank of England will increase interest rates by the end of the year.

Gains for the Yen were restrained however following the publication of weak data out of Japan. Early in the session data showed that Japan’s manufacturing activity expanded at a slower than forecast pace in July compared to the previous month. The cause for the fall was said to be as a result of the introduction of a sales tax increase earlier in the year.

According to Markit’s Japan Manufacturing Purchasing Managers Index (PMI) production fell to a seasonally adjusted figure of 50.8 in July, down from the previous month’s figure of 51.5. The output component of the index fell from Junes reading of 52.4 to 50.0 in July. The new orders index eased from 52.3 to 51.1 indicating that domestic demand eased.

Any figure above 50 indicates expansion whilst one below indicates contraction.

A separate report released by the Japanese Finance Minsitry showed that Japan’s trade deficit soared to a record high of 7.6 trillion Yen in the first half of the year as exports tumbled and imports surged.

Imports for the six months jumped 10 percent to 42.6 trillion yen ($420 billion) while exports rose 3.2 percent to 35.1 trillion yen ($346 billion), the preliminary data show. Imports from China including industrial machinery, consumer products and food jumped 14 percent,
leaving Japan with a 2.92 trillion deficit with China for the first half. Trade with the USA meanwhile remained in surplus territory as exports to the world’s largest economy increased by 4%, imports increased by 12%.

The deficit in June alone was more than three times that recorded in the previous year and came in at a huge 822.2 billion Yen. Imports surged by 8.4% year-on-years to 6.76 trillion Yen and exports fell by 2% to 5.94 trillion Yen. In May, Japans trade deficit was 911 billion Yen. Higher imports of fuel and gas have pushed Japan's trade balance into the red following the halting of all its nuclear reactors for safety checks after the 2011 disaster at the Fukushima Dai-Ichi nuclear plant. In January-June, imports of liquefied natural gas rose 12 percent while oil imports jumped 5%.

“While the trade deficit widened last month, it remains much smaller than before the sales tax hike. This suggests that net trade finally ceased to be a drag on GDP growth in the last quarter,” said Capital Economics analyst Marcel Thieliant.

The Pound meanwhile was weaker across the board after weaker-than forecast retail dampened sentiment towards the currency. Against the US Dollar the UK currency fell to its lowest level in a month.
According to the Office for National Statistics, retail sales increased by just 0.1% in June from the preceding month and were below forecasts for a figure of 0.3%. On a year on year basis UK retail sales increased by 3.6% in June, below expectations for a figure of 3.9%. In the quarter leading up to June, sales increased by 4.5% year on year to mark the fastest quarterly rise in sales for ten years. Despite that the Pound still fell.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates Japa Forecasts