Japanese Yen (JPY) Exchange Rate Holds Gains against US Dollar, Dips against Pound
After the Bank of Japan opted to leave stimulus unaltered the Japanese Yen was supported, and the safe-haven asset continued trading in the region of a three-month high against the US Dollar.
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The Japanese currency was also stronger against several of its other currency counterparts, including the Euro, as investors reacted to the central bank’s policy meeting.
The BOJ stated that the local economy is likely to continue experiencing a gradual, steady pace of recovery and intimated that the quantitative easing measure deployed to date have been having the desired effect.
As the central bank acknowledged that the stimulus is working and helping Japan’s economy improve the Yen advanced.
In the view of London-based forex expert Alvin Tan; ‘The impression given from the BOJ is that it is in no hurry to implement additional easing measures. This is pushing back on market expectations for further stimulus in July. As a result, the Yen is strengthening.’
Overnight Japanese data also showed a 5.1 per cent increase in merchandise trade exports in April, year-on-year. A gain of 4.8 per cent had been expected.
Merchandise trade imports rallied by 3.4 per cent on the year, significantly more than the 0.8 per cent gain anticipated.
Meanwhile, supermarket sales in the nation were down 5.4 per cent in April from the same period of the previous year, following a 9.4 per cent annual increase in March.
Although the Yen was holding its own against the US Dollar during European trading, the Asian asset softened against a broadly bullish Pound.
Sterling posted widespread gains in the aftermath of the release of encouraging retail sales data for the UK.
Sales excluding autos climbed by a whopping 1.8 per cent last month, considerably more than the monthly increase of 0.5 per cent anticipated.
Sales including autos were 1.3 per cent stronger month-on-month and 6.9 per cent higher on the year.
Before the UK data was released strategists from BNP Paribas SA observed; ‘While markets have probably become accustomed to strong UK data, a bigger potential market mover would be a shift in tone by the BoE. We will be watching for signs of dissent in today’s MPC minutes’.
However, the Pound continued trading higher even as the BoE minutes showed that all nine members of the Monetary Policy Committee were in favour of leaving interest rates at record lows at the last BoE gathering.
During Australasian trading Japan’s Markit manufacturing PMI is due for publication. The measure gave a reading of 49.4 in April, below the 50 mark separating growth from contraction, so investors will be hoping for a stronger result tomorrow.
Of course British growth data will also dictate the performance of the GBP/JPY pairing on Thursday.
The US Dollar is currently trading against the Japanese Yen in the region of 100.9600 and the British Pound is currently trading against the Yen in the region of 170.7750.