Pound Yen Exchange Rate Today: GBP/JPY Holds Gains after GDP Data

May 22, 2014 - Written by Minesh Chaudhari

STORY LINK Pound Yen Exchange Rate Today: GBP/JPY Holds Gains after GDP Data

While the Yen advanced yesterday after the Bank of Japan opted to leave stimulus on hold, the Asian asset pared gains against the Pound and US Dollar on Thursday.

As of 20:00, the Pound Sterling to Japanese Yen exchange rate is trading up 0.14pct at 171.62532 GBP/JPY, whilst the Euro to Japanese Yen exchange rate is trading up 0.13pct at 138.95637 EUR/JPY.

Over the course of Australasian trading the Yen lost ground against its peers as better-than-forecast manufacturing data for China reduced global growth concerns.

China’s manufacturing PMI came in at 49.7 in May, up from 48.1 in April and beating estimates for a reading of 48.3

While the gauge remains below the 50 mark separating growth from contraction, this was a five month high and a notable improvement.

With investors emboldened by the report, the Yen softened.

According to currency strategist Kiran Kowshik; ‘The Chinese PMI has provided a fillip for risk appetite and that’s why we’re seeing the Yen weakening today. Some of the short Dollar-Yen positions established in recent days have been squeezed.’

In a statement published with the figures HSBC economist Hongbin Qu intimated that China’s disinflationary pressures eased while new orders/export orders returned to expansion. However, he also added; ‘downside risks to growth remain, particularly as the property market continues to cool. We think more policy easing is needed to put a floor under growth in the coming months.’

The Yen also lost ground against Sterling as the British asset was supported by UK first quarter growth data.

The GDP report confirmed that the UK economy expanded by 0.8 percent in the first three months of the year, as previously estimated.

On the year GDP was 3.1 per cent stronger.

However, domestic exports dropped by 1.0 per cent in the first quarter rather than stagnating and imports fell by 1.1 per cent instead of climbing the 0.2 per cent expected.

The Pound was still riding high following yesterday’s impressive UK retail sales surge, but any further advances were limited today as separate data showed that the UK posted a larger-than-forecast deficit in April.

While today’s US reports (including the nation’s manufacturing figures) will be of interest, further Yen movement could occur before the weekend as a result of China’s conference board leading index.

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