Pound Japanese Yen (GBP/JPY) Exchange Rate Slips despite Japanese Exports Hitting Four-Year Low

April 20, 2020 - Written by John Cameron

STORY LINK Pound Japanese Yen (GBP/JPY) Exchange Rate Slips despite Japanese Exports Hitting Four-Year Low

Pound Sterling Japanese Yen (GBP/JPY) Exchange Rate Falls despite Disappoiting Japan Trade Data

The Pound Sterling Japanese Yen (GBP/JPY) exchange rate slides, leaving the pairing trading at around ¥134.2000.

The Japanese Yen remained under pressure after the country’s exports plummeted by the most in around four years in March.
Covid-19 hit global trade, causing exports to decline by a lower-than-forecast -11.7%.

Added to this, the data showed that exports to Japan’s largest trading partner, China, slumped by -8.7% in March. Shipments to the United States suffered the largest drop since April 2011, falling by -16.5%.

Commenting on this, Norinchukin Research Institute’s chief economist Takeshi Minami noted:

‘The impact is likely to continue in April and onwards, which will prevent economic activity from normalizing. That will keep trade volume constricted globally.’

Added to this, the Yen remained under pressure after Japanese Prime Minister Shinzo Abe expanded the state of emergency to include the whole of Japan.

The government also expected economic activity will suffer the worst decline since the Great Depression in the 1930s.

However, the Yen was still able to make some gains against the Pound as traders flocked to traditional safe-haven currencies over the riskier Pound.

Too Soon to End the UK’s Coronavirus Lockdowns

Meanwhile, the Pound remained under pressure as the death toll from the coronavirus pandemic continued to rise. This also sparked ministers to say it was too soon to talk about easing the current lockdowns in place to help stop the virus spread further.

Like many countries, Covid-19 has frozen economic activity in Britain which has seen economists to predict a deep recession.

Sterling suffered some losses after the British Retail Consortium (BRC) said the number of Britons leave their homes to shop plummeted by -83%.

This followed earlier data from the BRC which showed retail sales spending fell by more than a quarter. And this added that today's figures suggested the decline in sales is going to be even sharper than expected.

Commenting on the data, BRC chief executive, Helen Dickinson noted:

‘Footfall dropped in early March, as many people chose to stay at home and reduce the risk of catching coronavirus. This downwards trajectory was accelerated by the government’s decision to put the UK on lockdown.’

Meanwhile, property website Rightmove said that it is unable to provide meaningful house price data due to the low levels of new houses being listed on their website due to the pandemic.

Pound Yen Outlook: Will GBP/JPY Extend Today’s Losses?

Looking ahead to Tuesday, the Pound (GBP) could suffer losses Following the release of British unemployment statistics.

If the UK’s claimant count change increases in March due to the coronavirus pandemic, it will leave Sterling under pressure.

Meanwhile, the Yen could continue to make gains against the Pound if traders continue to move away from riskier currencies in favour of more traditional safe-havens such as the Japanese Yen.

If risk appetite suffers, the Pound Japanese Yen (GBP/JPY) will extend Monday’s losses.

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TAGS: Pound Yen Forecasts