Pound Sterling to Yen Exchange Rate Today - GBP/JPY Little Changed on Day of Central Bank Meetings

September 4, 2014 - Written by Ben Hughes

STORY LINK Pound Sterling to Yen Exchange Rate Today - GBP/JPY Little Changed on Day of Central Bank Meetings

The Pound to Yen Exchange Rate (GBP/JPY) was seeing little movement as the week came to an end as economists focused their attention on the latest policy meetings due to be held by the Bank of England and European Central Bank.

Early in the session, the Japanese Yen recovered some previously lost ground against the US Dollar and other major peers as the Japanese Central Bank announced that it had kept its policy target intact, just as economists had been forecasting.

Bank of Japan policy makers voted unanimously to leave the banks quantitative easing target unchanged. The bank also said that it was optimistic that the Asian nation’s economy is on the right track despite the release of softer than forecast retail sales released earlier in the month.

Sterling meanwhile was seeing little movement against its major peers as investors settled into a waiting pattern ahead of the Bank of England’s latest interest rate and quantitative easing decision announcement.

Economists are widely forecasting that BoE policy makers will choose to leave interest rates unchanged at 0.5%. If there is any indication that the Bank is edging closer to voting in favour of a rate hike then the Pound will strengthen. In addition, they were right. The BoE voted to maintain rates and QE unchanged.

We will not find out how policy makers voted until the release of the meetings minutes released later in the month.

Sterling did receive some support on Thursday morning after a report released by the Society of Motor Manufacturers and Traders showed that New car sales increased by 9.5% in August, 72,163 vehicles registered.

The figures mark the 30th consecutive increase in sales, the best run recorded since 1959.

Howard Archer, chief UK economist at IHS Global Insight, said: "The economic fundamentals still look largely positive for the motor industry which will hopefully fuel ongoing healthy car sales – although the growth rate is highly likely to ease back given double-digit growth both in 2013 and over the first eight months of 2014.

"One concern for car manufacturers is that extended low earnings growth could become a constraint for private car sales while some consumers will also be worried by the prospect that interest rates will start to rise before long."

Against the Euro, the Japanese Yen made gains as investors grew increasingly jittering ahead of the European Central Banks policy meeting.

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