May 15, 2019 - Written by John Cameron
STORY LINK Pound Japanese Yen (GBP/JPY) Exchange Rate Slides as Japanese Construction Orders Rise
GBP/JPY Exchange Rate Falls on Lack of Cross-Party Brexit Consensus
The Pound Japanese Yen (GBP/JPY) exchange rate is down by 0.8% today and is currently trading around ¥140.4130 on the inter-bank market.
The Japanese Yen (JPY) rose against the Pound (GBP) following the publication of the Japanese construction orders figures for March, which jumped to 66.1%.
Japanese flash machine tool orders figures for April, however, fell by -33.4%.
Shinzo Abe, the Japanese Prime Minister, has recently said that he’d encourage domestic demand as the Japanese economy has shown increasing weakness ahead of the planned increase of sales tax in October.
‘We are seeing weakness in exports and some production sectors, and we must pay close attention to overseas economies going forward. It’s important to secure a virtuous cycle of growth and distribution by supporting domestic demand.’
The Pound, meanwhile, has fallen as doubts set in surrounding Brexit following Prime Minister Theresa May’s announcement that a vote would go ahead in early June, despite the lack of a cross-party consensus emerging from the two major parties.
Pound Japanese Yen (GBP/JPY) Exchange Rate Sinks as Brexit Gloom Returns
Sterling has failed to benefit from reassurances from Downing Street that Labour and the Conservatives are drawing up a compromise on the Brexit withdrawal deal.
A spokesman for Theresa May said:
‘This evening the prime minister met the leader of the opposition in the House of Commons to make clear our determination to bring the talks to a conclusion and deliver on the referendum result to leave the EU.’
Many MPs, however, have commented that they will likely vote down May’s Brexit deal next month, seeing a lack of developments regarding the deal – particularly surrounding the customs union – as limiting parliamentary support.
Nigel Dodd, Westminster’s leader for the DUP, commented:
‘The prime minister has not pursued the one option that has ever achieved a positive vote for something in parliament. Alternative arrangements to the backstop won easily while everything else has failed.’
GBP/JPY Outlook: Cross-Party Brexit Talks to Remain in Focus
Japanese Yen traders will be looking ahead to tomorrow’s publication of the Japanese foreign bond investment figures for May.
These will be followed by the foreign investment in Japan stocks figures, and with any signs of improvement, this could see the Japanese Yen hold on to today’s gains.
Sterling traders, meanwhile, will be awaiting the speech by the Bank of England’s Monetary Policy Committee member, Jonathan Haskel, and with any gloomy comments about the UK’s economy, this could further weaken the GBP/JPY exchange rate.
The Pound Japanese Yen exchange rate will remain focused on cross-party Brexit talks ahead of June’s vote, and with any compromise deal emerging between the two parties, this could benefit Sterling.
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TAGS: Japanese Yen Forecasts Pound Yen Forecasts