While Sterling has edged away from the highs recorded against the Yen during the Asian session, the GBP/JPY pairing is still ending the week notably stronger than it began as yesterday’s impressive UK trade balance and factory orders data continued to lend the Pound support.
The Yen also posted widespread declines against its peers overnight as a result of comments issued by Bank of Japan Governor Haruhiko Kuroda.
Earlier this week the BOJ opted to leave policy unaltered, although investors are now predicting that the central bank will have to increase stimulus before the middle of next year.
As well as sliding to a four-month low against the US Dollar and a four-year low against the Euro the Yen floundered against the Pound as Kuroda stressed that restricting an increase in long-term yields will be a key priority.
The GBP/JPY exchange rate hit a low of 163.2380
Whilst speaking to parliament in Tokyo, Kuroda asserted that inflation will reach the 2 per cent target set by the BOJ within the two-year timeframe allocated. He also stated that the Yen isn’t ‘excessively weak’ at the moment.
According to currency strategist Sean Callow; ‘The BOJ’s policy stance should be working towards a weaker Yen. Higher yields in the States will surely draw more outflows from Japan, where the BOJ is maintaining QE at full pace.’
In a quiet news day for the UK further GBP/JPY movement may be limited before the weekend.
Next week Japanese data to look out for includes small business confidence figures, the publication of minutes from the Bank of Japan’s policy meeting, large retailer’s sales data, a domestic jobless rate report, household spending figures and the national consumer price index.
Current Japanese Yen (JPY) Exchange Rates:
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 101.0200 <
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 163.8190 <
The Euro/Japanese Yen Exchange Rate is currently in the region of: 136.5760 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 82.9569 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 92.8263 <
(Correct as of 10:30 GMT)