Pound Falls against Yen (GBP/JPY) as Japanese Service Sector Improves Markedly

May 7, 2015 - Written by John Cameron

STORY LINK Pound Falls against Yen (GBP/JPY) as Japanese Service Sector Improves Markedly

GBP/JPY Weaker as UK Election Dawns

The Pound had a mixed day on Thursday and slipped against several majors including the Yen after upbeat Japanese data emerged. The Japanese nation recorded some favourable developments in April with the Services Purchasing Managers Index climbing out of contraction territory to record growth instead. The March index had resided at 48.4, but the April stat managed to climb higher to 51.3.

The report read: ‘Latest data highlighted an improvement in business conditions in the Japanese service sector. Activity expanded, having contracted in the previous two survey periods, while new orders increased at the fastest pace in five months. Subsequently, services firms hired additional staff in April. Meanwhile, upward cost pressures were evident as input prices continued to rise, although at a slightly lower rate than observed in the prior month.’

As a result, the Japanese Composite PMI managed to climb from 49.4 to 50.7 in April also.

Economist Amy Brownbill gave her view on the matter, saying: ‘Reflecting a return to activity growth business sentiment regarding output over the next 12 months strengthened in April. Moreover, the degree of optimism was the joint-strongest in over one-and-a-half years.’

BOJ Meeting Minutes to Impact Yen

Friday’s set to be another day of influence for the Yen with the release of the latest Bank of Japan meeting minutes. The minutes could see the Yen exchange rate swing, especially if any debate on policy is contained within them. Meanwhile, the UK general election is causing some interesting Pound movement on Thursday. The Pound has been sensitive to political uncertainty for some time and the wait is finally over today when citizens can cast their votes. Although there won’t be a conclusive outcome until tomorrow, there’s the possibility that in the early hours of tomorrow morning a clearer view of the outcome will emerge.

Meanwhile, UK New Car Registrations data came out on Thursday which showed a decline on the year in April, falling from 6.0% to 5.1%.

Advertisement

Industry expert Mike Hawes commented: ‘We are confident that the UK’s new car market – so symbolic of economic mood – will continue to thrive, but long-term success will depend largely on economic and political stability in the months and years ahead.’

Friday could also hold some data-dependent Pound movement in store with the release of UK Trade Balance stats. The Total Trade Balance number is expected to come in at -£2400 in March after the previous month’s -£2859.

Like this piece? Please share with your friends and colleagues:

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: Currency Predictions Japanese Yen Forecasts Pound Sterling Forecasts