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FX Outlook: GBP/JPY Exchange Rate Trends in Narrow Range after BoJ Announcement, Safe-Haven demand Rises on Greece

June 18, 2015 - Written by Admin

GBP/JPY Exchange Rate Steady after Japanese Data



The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate was trending in the region of 195.2000 on Friday, little changed on the day's opening levels. During the Asian session Japan's All Industry Activity, Coincident and Leading Indexes all came in below forecast levels. The Bank of Japan also left fiscal policy unchanged, as expected by economists.

Earlier...

GBP to JPY Exchange Rate Declines Today as Yen Boosted by Risk-Off Environment



The Pound slipped against the Japanese Yen on Thursday as investors sought safe-haven assets amid the ongoing deterioration of the situation between Greece and its creditors. Greece has vowed not to make its debt repayments to the International Monetary Fund if a deal isn’t in place and the IMF has stated that it won’t accept any further delays in payments past June 30th.

JPY Rises as Greece Situation Unfolds, FX Risks Multiply, EUR Falls



Economist Diego Iscaro commented: ‘Increasing uncertainty regarding the outcome of the negotiations will result in higher volatility in Eurozone financial markets (most likely through pressurizing bond yields in the southern periphery countries), as well as weighing down on confidence levels.’


However, despite the JPY rise on Thursday, the Yen hasn’t been the most popular currency in the market of late. Japan’s exports continue to fall and consumer spending is still struggling. Add that to looser monetary policy conditions and a downturn in both economic growth and confidence, the JPY exchange rate has taken a hit against other majors.

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Additionally, Japan’s Cash Earnings figure dropped in April’s final reading, from 0.9% to 0.7% on the year. Meanwhile the Pound was able to climb against a host of other majors after UK data had printed favourably. The UK’s labour market figures on Wednesday showed wage growth had picked up from 2.1% to 2.7% on the year in April, while the level of unemployment remained at 5.5%.

Pound Sterling (GBP) Exchange Rate Offered Support from Stable Retail Sales Figures



Thursday continued with the upbeat figures with the UK’s Retail Sales number printing above expectations. GBP was offered some support when the month of May registered 0.2% growth rather than the -0.2% predicted, allowing the annual figure to remain stable at 4.6%, rather than dropping to 4.3% as was initially estimated. Friday will see the release of the UK Central Government NCR and Public Finances data which is expected to have a moderate impact on the market.

BNPP JPY Exchange Rate Outlook - Yen Weakness Supporting Japanese Growth



Many industry experts believe that the weaker Yen could be offering support to certain areas of the economy.

BNPP voiced its views, saying: ‘Japan’s May external trade balance (SA) beat expectations at JPY -182 billion as exports increased and imports decreased on a year-on-year basis. From trough of JPY -1.81 trillion in March 2014, the deficit has steady improved with the trade balance now effectively zero. It is hard to argue with the policy of JPY depreciation when faced with such a steady improvement.’





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TAGS: Japanese Yen Forecasts Pound Sterling Forecasts

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