August 4, 2020 - Written by John Cameron
STORY LINK Pound to Japanese Yen (GBP/JPY) Exchange Rate Falls as Japanese Yen Benefits from Safe-Haven Status
GBP/JPY Exchange Rate Sinks as Dimming Global Economic Outlook Boosts Safe-Haven Demand
The Pound to Japanese Yen (GBP/JPY) exchange rate fell by -0.4% today, with the pairing currently fluctuating around ¥138.098.
The Japanese Yen (JPY) rose today as concerns over the global economy have benefited the safe-haven currency. With global Covid-19 infection rates continuing to rise, investors have fled to safe-havens like the US Dollar, Swiss Franc, and Japanese Yen instead.
Meanwhile, in other Japanese economic news, yesterday saw the release of the final Jibun Bank manufacturing PMI for July, which remained in contraction territory at 45.2.
Tim Moore, Director at IHS Markit, commented on the report:
‘Japan’s manufacturing sector remained severely impacted by the COVID-19 pandemic and subsequent downturn in worldwide economic conditions. However, the headline PMI recovered some of the ground lost in the second quarter, helped by the smallest declines in output and new orders for five months during July.’
However, we could see the Japanese Yen (JPY) shed some of its gains if the outlook for Japan’s economy continues to be compromised by rising Covid-19 cases.
Pound (GBP) Sinks as UK Economic Outlook Darkens
The Pound (GBP) struggled today as Britain’s coronavirus situation continues to threaten the economy. As a result, fears over a possible second lockdown for London are dampening confidence in the nation’s economic recovery.
Today also saw the restaurant chain, PizzaExpress, say that it may have to cut 1,100 of its staff as the coronavirus situation continues to drag down significant sections of the UK economy.
Zoe Bowley, who is involved with running Pizza Express in the UK and Ireland, was downbeat, saying:
‘Our business has a long history of success, but the UK-wide lockdown has hit the hospitality industry particularly hard. As a result, it is with a heavy heart that we expect to permanently close a proportion of our restaurants, losing valued team members in the process.’
GBP/JPY Forecast: Could a Dovish Bank of Japan Weaken the Japanese Yen?
Japanese Yen (JPY) investors will be awaiting tomorrow’s speech from the Bank of Japan’s Governor, Haruhiko Kuroda. Any dovishness about the economy would prove JPY-negative.
Pound (GBP) traders, meanwhile, will be paying close attention to tomorrow’s release of the UK Markit Services PMI for July. If this improves, then we could see Sterling rise as Britain’s largest sector shows signs of recovery.
The GBP/JPY exchange rate will likely remain in negative territory this week, with fears continuing to grow over the UK’s coronavirus situation.
International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
TAGS: Japanese Yen Forecasts Pound Sterling Forecasts