GBP/JPY slides to near 198.50, Japan’s Akazawa cancels visit to Washington
- GBP/JPY is down 0.2% to near 198.50 as the Japanese Yen trades firmly.
- BoJ’s Nakagawa warns of economic risks stemming from US trade policy.
- BoE’s Mann supported holding interest rates at their current levels for longer.
The GBP/JPY pair declines to near 198.50 during the European trading session on Thursday. The pair faces selling pressure as the Japanese Yen (JPY) outperforms a majority of its peers. The Japanese currency gains even as Bank of Japan board member Junko Nakagawa warned of domestic economic uncertainties due to tariffs imposed by the United States (US) on imports from Japan.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.20% | -0.14% | -0.35% | -0.17% | -0.33% | -0.23% | -0.17% | |
| EUR | 0.20% | 0.10% | -0.15% | 0.02% | -0.10% | -0.01% | 0.04% | |
| GBP | 0.14% | -0.10% | -0.26% | -0.03% | -0.19% | -0.08% | -0.03% | |
| JPY | 0.35% | 0.15% | 0.26% | 0.21% | -0.02% | -0.16% | 0.21% | |
| CAD | 0.17% | -0.02% | 0.03% | -0.21% | -0.16% | -0.05% | 0.10% | |
| AUD | 0.33% | 0.10% | 0.19% | 0.02% | 0.16% | 0.10% | 0.14% | |
| NZD | 0.23% | 0.00% | 0.08% | 0.16% | 0.05% | -0.10% | 0.07% | |
| CHF | 0.17% | -0.04% | 0.03% | -0.21% | -0.10% | -0.14% | -0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
BoJ’s Nakagawa said in a speech earlier in the day that "there remain many uncertainties”, despite the US and Japan reaching a trade agreement. He added that US tariff policies are weighing on Japan’s “business and household sentiment”.
Signs of rising domestic economic uncertainty could be a drag on market expectations that the Bank of Japan (BoJ) will raise interest rates again in the remainder of the year.
Meanwhile, Japan's trade negotiator Ryosei Akazawa has cancelled his scheduled visit to Washington, which aimed to reveal financial details of Tokyo's $550 billion investment package in exchange for reduced tariffs, Reuters reported.
In the United Kingdom (UK), the Pound Sterling (GBP) faces selling pressure despite Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann stating that interest rates should remain at their current levels for a longer period. Mann supported for a tight monetary policy stance as price pressures appear to be persistent.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.