Pound Sterling to Japanese Yen Exchange Rate Drops 0.4%

March 12, 2015 - Written by Frank Davies

STORY LINK Pound Sterling to Japanese Yen Exchange Rate Drops 0.4%

Over the course of the European session, the Pound lost -0.4% against the Japanese Yen to trade in the region of 180.4700. The pairing had previously hit a low of 180.4300 in spite of UK trade data beating forecasts. The Yen had been the subject of scrutiny earlier in the week as the safe-haven asset fell beyond a seven-year low against the US Dollar as a result of persistent ‘Greenback’ strength and speculation surrounding the diverging fiscal policies of the Federal Reserve and Bank of Japan. The USD/JPY pairing was trading in the region of 122.02 against the Dollar, its lowest level since mid 2007. According to industry expert Russell Thompson; ‘The Yen is in the leading group in the race to the bottom. Japan’s own effectiveness from its [quantitative easing] will diminish as the European version launches. Followed by China’s. I think it’s a mistake, but I see every chance of further QE from Japan in the months ahead.’

Sterling began losing ground against peers like the Yen on Thursday after the UK’s Industrial/Manufacturing production reports fell short of forecasts and extended losses overnight as Japan’s Tertiary Industry Index came in at 1.4% month-on-month in January, beating forecasts for a figure of 0.5%. Although the UK’s Balance of Trade report showed that the nation’s deficit narrowed by considerably more than expected at the beginning of 2015, the Pound failed to derive any benefit from the report. Economist Samuel Tombs said of the result; ‘with the economic recovery set to be fuelled this year by strong growth in consumer spending, it remains more likely that imports will grow at a faster rate than exports.’ Similarly, economist David Kern noted; ‘The strengthening of the Pound makes it difficult to see the trade deficit continuing to narrow in the coming months.’

Later on Thursday the Pound extended losses against peers like the Euro, US Dollar and Yen as Bank of England Governor Mark Carney delivered a speech in Sheffield. While much of what he said has been heard before, Carney did add that the strength of the domestic currency could keep inflation lower for longer. Japan’s industrial production data could have an impact on GBP/JPY trading overnight. Before the weekend, a final flurry of Pound to Japanese Yen exchange rate movement may be inspired by the UK’s Construction Output report. The pace of output is believed to have increased on both a month-on-month and year-on-year basis.

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: Daily Currency Updates Japanese Yen Forecasts Pound Sterli Forecasts