As a significant surge in Japanese consumer prices lowered the odds of the Bank of Japan increasing an already unprecedented level of stimulus in the foreseeable future, the Yen was able to advance on several of its most traded peers during the local session.
The Japanese Yen exchange rate was in the region of 151.9330 Yen to one British Pound as of 11:00 am GMT
As well as rallying by 0.6 per cent against the US Dollar (increasing its five-day advance against the ‘Greenback’ to 2 per cent) the Yen strengthened to 151.6880 against the Pound.
The latest figures have shown that consumer prices in Japan (excluding food) climbed by 0.4 per cent last month – more than economists had expected.
A weakening yen and rising energy costs were cited as key factors behind the increase.
In response to the news currency strategist Niels Christensen commented: ‘We had the inflation data in Japan which was a bit higher than expected and that’s reducing expectations of further monetary easing and giving a lift to the Yen.’
The Yen’s advance on the US Dollar was also aided as the ‘Greenback’ broadly softened in response to the declining odds of the Federal Reserve opting to rein in fiscal stimulus in the months ahead.
The GBP/JPY exchange rate hit a low of 151.3830
An absence of UK news is likely to limit GBP/JPY movement as we head into the weekend.
However, in the hours ahead the USD/JPY pairing could experience additional fluctuations in response to the publication of the US University of Michigan confidence index. Economists are expecting the gauge to come in at 84, but a surprising result could lead to volatility.
As one industry expert notes: ‘The Dollar will be more vulnerable to downside surprises in the data, because bullish positions have been built up so much. The market consensus is a September start to tapering, and it’s hard to imagine it would happen earlier than that, but there’s a good chance it could happen later.’
Despite recent gains, the Yen has still softened by 3.1 per cent in the past three months. Some industry experts have forecast that we have seen the worst of violent Yen movement, and that the Asian currency may well see more modest weakness in the months ahead.
Current Japanese Yen (JPY) Exchange Rates
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.6400 <
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 151.9330 <
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.0330 <
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 79.8258 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 91.5872 <
(Correct as of 11:00 GMT)
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