Pound Sterling to Japanese Yen Exchange Rate Forecast to Soften on British Construction Data

April 2, 2015 - Written by Ben Hughes

STORY LINK Pound Sterling to Japanese Yen Exchange Rate Forecast to Soften on British Construction Data

The Pound Sterling to Japanese Yen exchange rate softened by around -0.29% during Thursday’s European session. After British construction data failed to meet with the market consensus, the Pound softened versus the majority of its most traded currency rivals. As has been the case for several weeks now, the Pound is struggling against damp investor confidence as we draw ever closer to the general election. The Japanese Yen also declined versus many of its major peers. This is as a result of a report from the Bank of Japan (BOJ) which showed household spending failed to progress after last year’s sales tax hike.

The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 176.8000. The solitary British economic data publication on Thursday printed relatively disappointingly, causing the Pound to soften versus the majority of its most traded currency competitors. The Construction PMI was forecast to tick lower from 60.1 to 59.8, but the actual result dropped to 57.8. Tim Moore, Senior Economist at Markit, said; ‘UK construction output growth has settled in at a strong pace so far in 2015, although the recovery has lost some of its swagger since last year. All three main categories of construction activity saw a growth slowdown in March, in part reflecting softer new business gains as some clients delayed spending decisions ahead of the general election. However, UK construction companies are highly upbeat about their prospects for growth over the course of the next 12 months, helped by improving economic fundamentals, strong order books and a healthy pool of new invitations to tender.’

The Japanese Yen, meanwhile, softened versus most of its major peers after the Bank of Japan indicated that household spending was below levels required to spur economic recovery. ‘While the economy emerged from recession thanks to a rebound in exports and factory output, private consumption has been weak due to the higher levy and the rising cost of living as the weak yen drove up import costs,’ stated Leika Kihara writing for Reuters. ‘In a sign of hope, the diffusion index measuring how households felt about the current state of the economy improved 8.3 points from December to minus 24.6 in March, the BOJ's quarterly survey on people's livelihood showed on Thursday,’ she added.

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