Pound Climbs against Japanese Yen (GBP/JPY) Ahead of UK Data Releases

April 16, 2015 - Written by Tim Boyer

STORY LINK Pound Climbs against Japanese Yen (GBP/JPY) Ahead of UK Data Releases

Sterling Rallies, Yen Declines, UK Data in Focus

The Pound jumped higher against the Japanese Yen on Thursday after an interesting few days for domestic data. Earlier in the week, Japanese Machine Orders jumped from 1.9% in January, above the 4.3% expectation to reside at 5.9% in February.

Moody’s Analytics had said prior to the release: ‘Japanese firms are enjoying record profits and sitting on plenty of cash, but remain reluctant to invest because of concern about the economic outlook.’

On Wednesday Bank of Japan Governor Haruhiko Kuroda spoke and remained optimistic about Japan’s low levels of inflation.

Kuroda stated: ‘The underlying inflation trend is improving steadily. Japan’s economy is expected to continue recovering moderately as a trend.’

Last October saw the central bank expand its huge stimulus programme in an attempt to combat falling crude prices and further deflation. Kuroda suggested that the stimulus measures will remain in place until the central bank is able to reach its 2% inflation target. Meanwhile, Thursday saw Tokyo’s Condominium Sales contract by -4.0% in March on the year after February’s already disappointing -2.0%.

Japanese Confidence Data Ahead, Yen Movement Forecast

Friday could be an interesting day for the Yen when the Japanese Consumer Confidence Index emerges. Experts have suggested there would be a slight rise from the February reading of 40.7 to 41.3. However, any figure that fails to record growth could pressure the Yen lower. Meanwhile, the Pound exchange rate could also be in for some movement following the release of UK labour market figures. One of the main figures investors will be eyeing on Friday is the Average Weekly Earnings number which details any progress in wage growth. After months of remaining sluggish, any expansion in wages could help to bolster the Pound significantly.


The Pound to Japanese Yen exchange rate hit a high of 177.9400

Additionally, the UK Unemployment rate will be released and is expected to show joblessness declined from 5.7% to 5.6% in the three months through February. The ecostat is highly probable if the Employment Change number manages to hit 170K as economists expect after the previous 143K recording. Another factor that could influence Pound movement is the ongoing debate between political parties. The Pound is likely to post losses as May 7th, the day of the UK general election, draws closer. However, it’s not expected that the Pound will recover right away with the prospect of a hung parliament likely to cause Sterling exchange rate fluctuations. A messy election could lead to months of Pound weakness as a political shakeup and uncertainty clouds the UK currency.

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