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Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate Predicted to Edge Lower on Safe-Haven Demand

July 2, 2015 - Written by John Cameron

Greek Uncertainty Increases Safe-Haven Demand Japanese Yen (JPY) Exchange Rate Broadly Stronger



The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate edged lower by around -0.14% on Thursday afternoon.

The British Pound fluctuated versus its major peers on Thursday after domestic data produced a mixed-bag of results. June’s Nationwide House Prices declined by -0.2% on the month; missing the median market forecast -0.5% price increase. On an annual basis, House Price increased by 3.3%; significantly lower than the market consensus of 4.5%. ‘This maintains the gradual downward trend that has been in evidence since mid-2014,’ Nationwide economist Robert Gardner said. ‘House price growth continues to outpace earnings, but the gap is closing, helped by a pickup in annual wage growth.’


Pound Sterling (GBP) Exchange Rate Forecast to Trend Lower against the Japanese Yen despite Positive UK Construction Growth



In contrast, the Markit/CIPS UK Construction PMI bettered estimates of a rise from 55.9 to 56.5 in June, with the actual result reaching 58.1. Commenting on the report, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said; ‘Client expectations and strong order books were the recipe for success along with support from a resilient economic environment encouraging positive sentiment in the sector and resulting in accelerated and hastened purchasing activity. Staff numbers followed suit with boosted levels of employment and a larger number of full-time posts. There was a reduction in the reliance on sub-contractors in particular, as staff hiring gathered speed.’

The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trending in the region of 192.1200.

Japanese Yen (JPY) Exchange Rate Forecast to Edge Higher against the Pound on Damp Market Sentiment



The situation in Greece is having a significantly detrimental impact on trader risk-appetite with so many uncertainties regarding the ramifications of a Grexit and the outcome of the austerity referendum. One thing is for certain, whichever way the Greek’s vote there will be currency market volatility involved. A ‘yes’ vote will surely see a shakeup in the Greek government as the anti-austerity party elected to win a better deal for Greek debt relief. And if there is a ‘no’ vote victory then months of negotiations are likely to ensue...unless, of course, the Eurogroup decides it would be better off without Greece as part of the Eurozone.

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All this uncertainty in Europe has seen significantly heightened demand for safe-haven assets, such as the Japanese Yen.

The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate dropped to a low of 192.0100 today.

Morgan Stanley sees Pound Sterling to Japanese Yen (GBP/JPY) Exchange Rate Gaining as Contagion from Grexit would be Contained



‘We believe a lack of significant contagion, a proactive EU policy response and the reduced risk of a muddle-through scenario for Greece going forward should allow equities to make solid gains over the medium-term,’ stated Morgan Stanley analyst Graham Secker. If the contagion from a Grexit is indeed minimal, market sentiment ought to improve which would see diminished demand for the Japanese Yen and its safe-haven qualities.


The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate climbed to a high of 192.9400.


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