Pound to Yen Rate Today: GBP/JPY Higher as UK Retail Sales Soar

December 18, 2014 - Written by Toni Johnson

STORY LINK Pound to Yen Rate Today: GBP/JPY Higher as UK Retail Sales Soar

Pound Climbs Versus the Japanese Yen (GBP/JPY) as UK Retail Sales Soar after ‘Black Friday’ Sale

The Pound advanced against the Japanese Yen after UK Retail Sales figures printed favourably. The month of December saw Retail Sales growth reach 6.9% from the former positively revised 4.9%. The recent depreciation in the price of oil has offered UK consumers a little more disposable income at a time where wage growth has struggled to grow. HSBC economist Simon Wells stated that the number showed UK consumers were ‘taking full advantage of the fall in inflation and heading to the shops.’ Wells continued: ‘For now, British consumers are adopting their usual mantra in response to a windfall – spend, spend, spend.’ However some feel that the oil price tumble could cause problems in the global economy. Financial officer Joji Okada commented: ‘I’m really concerned for the global economy. It won’t just be the producers who crumble while people... fill up their cars with cheap gasoline. It’ll be an issue for the global economy.’

The infamous ‘Black Friday’ event adopted by Britons this year helped to encourage spending at sale prices. However, pre-Christmas sales have continued and spending is expected by some economists to have continued strongly into December. Saturday is expected to be the busiest shopping day of the year and Barclays retail expert Richard Lowe suggested that next week grocers ‘are fiercely competing to secure what will be the biggest shop of the year for the average customer.’

However, the Pound could have other opportunities to gain against fellow currency majors on Friday with the release of UK GFK Consumer Confidence figures. At present, the sentiment survey is expected to reach -1 in December after November’s -2. In addition, UK Central Government NCR, Public Finances and Public Sector Net Borrowing stats will also be out which could move the Pound. Looking at data next week, Tuesday’s BBA Loans for House Purchase and final Gross Domestic Product (GDP) figures are of moderate importance and therefore could see Sterling fluctuations. With market closures taking place next week over the Christmas period, Japanese data dominates the second half of the week. Some of the most influential data released will be Housing Starts, Jobless Rate, Industrial Production and Retail Trade all on Thursday 25th. Moreover, the Japanese National Consumer Price Index (CPI) will also be out for release which could cause significant swings in the Japanese Yen.

The Japanese Yen has been sought out in recent weeks as the Russia crisis causes concern that we could be entering a global slowdown. The Russian currency has been tumbling as falling oil prices and sanctions from the US and Eurozone weigh heavily on the Ruble. The Japanese Yen could be favoured in the near future for its safe-haven asset status.

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