Pound Falls versus Japanese Yen (GBP/JPY) ahead of Influential Japanese CPI Figures

November 27, 2014 - Written by Ben Hughes

STORY LINK Pound Falls versus Japanese Yen (GBP/JPY) ahead of Influential Japanese CPI Figures

The Pound slid against the Japanese Yen ahead of a host of Japanese domestic data releases.

The Yen is likely to experience fluctuations when the Japanese National Consumer Price Index (CPI) is released which is forecast to fall on the year from 3.2% to 3.0%. The Japanese Jobless Rate is expected to remain at 3.6% in October, while Household Spending is expected to pick up slightly on the year from -5.6% to -5.0%. Japan’s retail sector is expected to decline in October with the annual Retail Trade figure predicted to fall from 2.3% to 1.5%. Large Retailers Sales are expected to increase by 1.5% in October on an annual basis after September’s 0.5% increase. Any favourable Japanese figures could help to boost the Yen higher against other currency majors.

In addition, Bank of Japan (BOJ) Governor Haruhiko Kuroda stressed on Tuesday that the bank was ready to increase its stimulus to meet goals. Kuroda stated: ‘To achieve the price stability target, the BOJ has been taking “action” and will continue to do so. We will carefully watch market moves, including currency moves, and their effect on the economy.’

Japanese Yen Exchange Rate Outlook

The Yen has fallen dramatically in recent weeks as the Japanese economy fell into recession again. Japanese Prime Minister Shinzo Abe called for an early election—a move to give citizens the choice of continuing on with Abe’s economic stimulus attempts, or vote for another method. Strategist Camilla Sutton commented: ‘We have uncertainty on the political front and we have weaker domestic data combined with very aggressive policy coming from the central bank, all of which should be driving a weaker Yen.’

British Pound Exchange Rate Forecast

Meanwhile, UK data is in short supply toward the end of the week meaning the Pound will be sensitive to any new political or economic developments on a worldwide scale. However, the Lloyds Business Barometer rebounded on Thursday when the index jumped from 35 to 42 in November. The previous figure had been the lowest reading in over a year. Friday’s GFK Consumer Confidence Survey could offer some Sterling support if favourable; however, the index is expected to contract by -1 in November after October’s -2.

Nationwide House Prices will also be out on Friday which economists’ believe will dip on the year in November. 0.3% growth is forecast for November which would see a drop in the annual statistic from 9.0% to 8.6%. Friday will also bring with it Japanese Housing Starts and Construction Orders which could see the GBP/JPY exchange rate fluctuate.

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