Pound to Yen Exchange Rate Higher as JPY Weakness Continues Despite Japanese PMI Data

October 23, 2014 - Written by Toni Johnson

STORY LINK Pound to Yen Exchange Rate Higher as JPY Weakness Continues Despite Japanese PMI Data

The British Pound to Yen (GBP/JPY) exchange rate advanced on Thursday. However, gains may be short lived as the UK released downbeat data.

UK Retail Sales Including Autos fell by more than economists had forecast in September, sliding on the year to 2.7% from 3.7% instead of dipping to 2.9%.

The lower statistic demonstrates another area of the UK economy that’s slowing - a factor that offers Bank of England (BoE) doves support and undermines demand for the Pound Sterling (GBP).

Latest Exchange Rates:

The Pound to Yen exchange rate is +0.92 pct higher at 1 GBP equals 173.49619 JPY.
The Euro to Yen exchange rate today is converting +1.08 per cent higher at 136.92217 EUR/JPY.
The US Dollar to Yen conversion rate is +1.02 pct higher at 108.24400 USD/JPY.
The Hong Kong Dollar to Japanese Yen exchange rate today is converting +1.01 per cent higher at 13.95424 HKD/JPY.

Don't forget if you are waiting to find better exchange rates for a international payments, then you're best bet is to set up your future rate order with a foreign exchange broker.

Pound to Yen rate Today: Bank of England Meeting Minutes Cause GBP Softness

The Bank of England released its latest meeting minutes on Wednesday, an event which caused Sterling losses.

The Monetary Policy Committee (MPC) has seen a split between policymakers on the prospect of interest rate hikes in the last three meetings, with two of the nine members dissenting. However, the central bank has come under scrutiny in the past year for issuing conflicting statements.

Whilst BoE policymaker Martin Weale suggests that interest rates need to occur immediately to encourage growth in the UK economy, central bank Chief Economist Andrew Haldane announced that he felt ‘gloomy’ about the future of the UK economy and instead suggested that rate hikes weren’t likely to occur until next summer.

The minutes stated: ‘A premature tightening in monetary policy might leave the economy vulnerable to shocks, with the scope for any stimulus that subsequently became necessary being limited by the effective lower Bank rate. While the economy had been growing sufficiently quickly to absorb some of the slack in the economy, there were some signs that the pace of growth was beginning to ease.’

Japanese Manufacturing Purchasing Managers Index Gains

Meanwhile, the Japanese Yen (JPY) has been trending lower on Thursday even though Japan’s Markit Manufacturing Purchasing Managers Index (PMI) rose higher than predicted. Economists had initially expected the index to stagnate at 51.7 in October; however the actual figure attained 52.8. Markit economist Amy Brownbill commented: ‘Latest data indicated robust growth of operating conditions for Japanese manufacturers.’

However, the Yen was downbeat on Wednesday when Japan’s trade deficit widened far more than expected.

The Adjusted Merchandise Trade Balance showed it expanded from -912.4 billion Yen to -1010.1 billion, completely bypassing -918.5 billion forecasts.

The Yen has tumbled versus the US Dollar in recent months, and now some Japanese firms are appealing for the government to intervene if the currency continues to weaken.

Although some Japanese companies have benefitted from a weaker Yen, consumers haven’t. One company spokesperson commented: ‘If the Yen is guided too weak, raw material costs jump and firms that can’t pass on those costs become exhausted and find it hard to survive.’

JPY Forecast for Rest of Week:

In the rest of the week a lack of Japanese data will leave movement in the GBP to JPY exchange rate dependent on global developments.

Friday will be an influential day for Sterling with the release of Gross Domestic Product (GDP) figures.

However, in an otherwise relatively quiet data-day, trading movement may be minimal. Japanese Retail Trade numbers are out on Tuesday which may allow the JPY GBP to gain if favourable.

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