GBP/JPY Exchange Rate Softens to Monthly Low on Risk Aversion
In the wake of an International Monetary Fund report which outlined slow global economic recovery, traders have opted to invest in safe haven assets such as the Japanese Yen. Sterling, meanwhile, is struggling against tempered bets on the timing of a benchmark rate revision.
If you're looking to make an international money transfer, we recommend TorFX.
The Pound Sterling to Japanese Yen exchange rate is currently trending in the region of 172.5200.
On Friday the Pound declined against the majority of its most traded currency peers after the release of an International Monetary Fund report. The report suggested that the global economic recovery was much slower than anticipated. Additionally the report indicated that the prolonged period of low interest rates has encouraged excessive risk taking on global markets and could lead to a fresh financial crisis.
A disappointing construction output publication also added to the Sterling downtrend despite a set of better-than-anticipated trade balance figures.
As a safe-haven asset, the Japanese Yen benefitted from the IMF report and the renewed trader risk aversion strategies. This was in spite of mixed Japanese data on Friday which erred towards the negative. Of particular disappointment was the Consumer Confidence Index which was forecast to increase from 41.2 to 41.8, but the actual result dropped to 39.9.
The Pound Sterling to Japanese Yen exchange rate has fallen to a low today of 172.3600.
On Monday the Pound is still struggling against global economic disparity and general risk aversion. Sterling has generally trended lower against the majority of its most traded currency rivals despite the Lloyds Employment Confidence rising impressively from 6 to 10.
An absence of Japanese data on Monday has done little to prevent a surge on dampened risk sentiment.
Forecast for the Pound Sterling to Japanese Yen Exchange Rate
Sterling is likely to be subject to volatility on Tuesday after inflation data is published. Both the Consumer Price Index and the Core CPI are forecast to decline and move away from the 2.0% inflation target. The Bank of England have indentified inflation as the key obstacle preventing monetary policy normalisation so those invested in the Pound will be hoping that the data doesn’t follow the market consensus.
Tuesday’s Japanese data has the potential to provoke Yen volatility. The Domestic Corporate Goods Price Index and Money Stock publications will be of interest to those invested in the Japanese Yen, and both are forecast to decline from the previous figures.