Yesterday’s unexpectedly cautious policy statement from the Bank of England caused the Pound to broadly soften during local trade. The British currency continued to decline overnight and has weakened notably against the safe-haven Yen.
The Japanese Yen exchange rate was in the region of 149.6600 Yen to one British Pound as of 10:40 am GMT
However, although the Yen also strengthened against peers like the Euro, the Asian currency weakened beyond 100 Yen per Dollar ahead of the publication of today’s key US employment figures.
The US Dollar has been supported against the majority of its currency rivals as economists predict a gain of 165,000 in non-farm payrolls. The US unemployment rate is also expected to ease to 7.5 per cent.
The GBP/JPY exchange rate hit a low of 149.8850
But while the Yen may have weakened against the US Dollar, the outlook for Japan’s economy appears to be brightening.
Next week the Bank of Japan will meet for its latest policy meeting.
Growing signs that the BOJ’s unprecedented stimulus methods are having a positive impact has led industry experts to forecast that the central bank will maintain the current level of fiscal stimulus and paint a more optimistic picture of the economy.
The recent run of less-than-impressive data from China (Japan’s biggest trading partner) will also be on the policy meeting agenda.
Although signs of a slowdown in major Chinese sectors, like manufacturing, are a cause for concern the negative repercussions for Japan may be offset by the improving domestic environment and increasing economic momentum in the US.
According to one Tokyo-based economist: ‘Exports aren’t too strong, but growing, and consumer spending is holding up well. The economy is in pretty good shape and will remain so this quarter and next. Unless there’s a huge negative shock from overseas, the BOJ won’t have to act for some time.’
However, if today’s highly anticipated US employment data should meet or exceed expectations, and so increase the odds of the Federal Reserve adjusting its bond buying programme, the Yen could weaken further against its US counterpart.
The Pound is likely to remain under pressure ahead of next week’s UK GDP estimate. A positive result could boost the GBP/JPY pairing.
Current Japanese Yen (JPY) Exchange Rates
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.4600 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 149.6600 <
The Euro/Japanese Yen Exchange Rate is currently in the region of: 128.6890 <
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 78.2691 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 91.6166 >
(Correct as of 10:40 GMT)