GBP/JPY Exchange Rate Weakened by Carney’s Brexit Warning
The Pound Japanese Yen (GBP/JPY) exchange rate was placed on the defensive on Thursday morning as Bank of England (BoE) Governor Mark Carney warned the UK is not ready for a no-deal Brexit.
At the time of writing the Pound Japanese Yen GBP/JPY exchange rate has fallen roughly 0.5% so far this morning, close to a one-week low.
Pound (GBP) Exchange Rates Sink as Carney Warns UK is Not Ready for a No-Deal Brexit
The Pound (GBP) slumped against the Japanese Yen (JPY) and the rest of its currency peers on Thursday as the BoE’s Mark Carney warned that large parts of the UK economy have not thoroughly prepared enough for a no-deal Brexit.
In an interview with BBC Radio 4, Carney stressed the need for the UK to secure a transition period as he suggested that ‘less than half of UK businesses have initiated contingency plans’ for an exit from the EU without a deal.
Speaking to BBC Radio 4’s Today programme Carney explained:
‘It is in the interests of the country to have some time to transition to whatever relationship there is.
‘The issue is preparedness. The thing that people don’t need to worry about is the financial system – it will be there for them.’
Is Britain ready for Brexit? Bank of England governor Mark Carney says: "All the industries, all the infrastructure of the country… as best as we can tell, the answer is no" #r4today https://t.co/Jd73S7lHEn pic.twitter.com/UB4a8y8ybM
— BBC Radio 4 Today (@BBCr4today) November 29, 2018
Carney’s warning comes hot on the heels of the publication of the BoE’s Brexit analysis on Wednesday evening, with the bank’s worst-case no-deal scenario suggesting such an outcome could lead to the UK experiencing its worst economic crash since the Great Depression.
GBP/JPY Exchange Rate Forecast: Robust Employment Figures to Bolster the Yen?
Looking ahead, the Pound Japanese Yen (GBP/JPY) exchange rate may extend its losses overnight on Thursday as Japan publishes its latest employment figures, should the recent downtrend in unemployment lead the jobless rate to fall back to 2.2%.
Also potentially aiding the Yen will be the release of Japan’s industrial production figures as economists forecast production will have crept higher again last month after a sharp contraction in September.
Meanwhile movement in Sterling is likely to remain dominated by Brexit over the next couple of weeks in the run up to the parliamentary vote on the EU withdrawal deal, with the Pound likely to be dented if it appears unlikely that Theresa May will garner the numbers to pass the bill through the House of Commons.