Overnight the Yen weakened against the majority of its currency peers as investors weighed up yesterday’s positive global economic news and opted to turn to higher risk assets.
The Japanese Yen exchange rate was in the region of 155.2810 Yen to one British Pound as of 10:35 am GMT
With strong manufacturing figures for the UK, Eurozone and China boosting trade prospects and improving the global economic outlook, the Yen fell to a month low against its US rival.
The Asian asset’s decline was aided as domestic data revealed that Japan’s monetary base expanded by the most for 40 years, an indication that the Bank of Japan’s easing efforts are seeing results.
According to foreign exchange expert Derek Mumford; ‘Our long-term view is that there will be Yen weakness. [The Yen will] inevitably weaken, particularly against the Dollar with the prospect of the winding back of quantitative easing in the very near future by the Fed and the very fact that the BOJ will keep printing money.’
The GBP/JPY exchange rate hit a high of 155.5320
Today’s better-than-anticipated UK construction data saw the Yen drop further against the Pound as the European session progressed.
While industry experts expected the UK construction sector index to come in at 56.9 it actually smashed estimates with a reading of 59.1.
If tomorrow’s UK services index also surprises to the upside the Yen could extend declines.
Additional USD/JPY movement can also be expected today as a result of US ISM manufacturing data.
If the manufacturing gauge meets or exceeds the 54 level estimated the odds of the Fed tapering stimulus within the next few weeks will increase, and US Dollar gains are likely to follow.
Other US news of interest today includes the nation’s construction spending and IBD/TIPP economic optimism survey. Positive results may boost the US Dollar at the expense of the Yen.
As Kumar Palghat of Kapstream Capital states; ‘Most of the Asian currencies appreciated quite a bit against the US Dollar. Now it’s just their turn to go down and the Dollar’s to go up because the US economy looks a lot better.’
With the Bank of Japan’s rate decision taking place later this week the Yen could be in for a volatile few days.
Current Japanese Yen (JPY) Exchange Rates:
< Down > Up
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.4300 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 155.2810 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.1280 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 77.5710 >
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 89.6408 >
(Correct as of 10:35 GMT)
Comments are closed.