April 14, 2021 - Written by John Cameron
STORY LINK Pound Japanese Yen Exchange Rate Edges Higher as Japan Lags Behind in Covid-19 Vaccine Rollouts
GBP/JPY Exchange Rate Rises as US Economic strength Weighs on Appeal for Japanese Yen
The Pound Japanese Yen (GBP/JPY) exchange rate rose by 0.3% today as strong US economic growth has weakened demand for the Japanese currency. The pairing is currently trading around ¥150.30.
Bank of Japan (BoJ) Governor Haruhiko Kuroda was optimistic about the weaker Japanese Yen, however, saying that it could help Japanese manufacturers as profits would increase from overseas.
Analysts at Reuters commented:
‘Many Japanese manufacturers now produce goods they sell overseas locally, which means a weak yen may not boost export volumes as much as it had in the past.’
Risk-on market mood has also limited the appeal of the safe-haven Japanese Yen today as investors have become more optimistic about the global Covid-19 situation.
However, Covid-19 rates continue to remain a problem throughout Europe.
Instead, JPY investors are remaining cautious as the outlook for the Japanese economy – one of the largest in the world – remains largely uncertain as the nation trails behind in coronavirus vaccinations.
Pound (GBP) Rise as UK Productivity Rose in 2020 Despite Covid-19
The Pound (GBP) rose today despite a lack of notable UK economic data.
Instead, GBP investors have become more optimistic about the state of Britain’s economy after the Office for National Statistics (ONS) revealed that productivity had risen.
The ONS commented:
‘Although there was substantial volatility during the year, this contrasts with a slow and steady decline in productivity during the 2008-09 economic downturn.’
UK markets are also becoming more confident about the outlook for the economy now that some lockdown restrictions have been eased.
Currently daily cases of Covid-19 are at 2,472, while daily deaths are up by 3 compared to last week, at 23.
However UK hospitalisations are showing signs of falling, with the figure down -685 compared to the previous week.
48.3% of the UK has now received at least one dose of the vaccine.
GBP/JPY Exchange Rate Outlook: Could a Dovish BoJ Weigh on the Japanese Yen?
Japanese Yen (JPY) investors will be awaiting tomorrow’s speech from the BoJ’s Governor Haruhiko Kuroda.
If Haruhiko is downbeat in his assessment of the Japanese economy, however, then the JPY/GBP exchange rate could further suffer.
The Pound Japanese Yen (GBP/JPY) exchange rate will continue to be driven by speculation surrounding the UK’s Covid-19 situation.
However, if the outlook for the UK remains largely positive, then Sterling could continue to head higher.
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 Yen Forecasts