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Pound Japanese Yen Exchange Rate Falls Despite Growing Confidence in UK Economic Outlook

Published: 13 May at 2 PM Tags: Pound Sterling, Currency Exchange, Forex, Rupee Exchange Rate, Yen Exchange Rate, UK, Exchange Rates, Economy,

The Pound Japanese Yen exchange rate fell by -0.2% today despite growing confidence in the UK economy after GDP data for March rose by 2.1%. The pairing is trading around ¥153.79 at the time of writing.

Sterling benefited yesterday as the latest UK growth data highlighted that the nation’s economy had improved from the Government’s successful rollout of Covid-19 vaccines.

However, the UK economy struggled in the first quarter of this year, falling by 1.5%.

UK Chancellor Rishi Sunak was however confident about March’s figure, saying that it was a positive sign that the nation’s economic recovery was now underway.

Sunak said:

‘Despite a difficult start to this year, economic growth in March is a promising sign of things to come. As we cautiously reopen the economy, I will continue to take all the steps necessary to support our recovery.’

Limiting the GBP/JPY exchange rate today, however, are reports that the Indian Covid-19 variant could delay the easing of the UK’s lockdown restrictions.

Prime Minister Boris Johnson has also refused to rule out using local lockdowns to stem any surges of the Indian variant.

The Japanese Yen (JPY) rose today after the Bank of Japan’s (BoJ) Kuroda struck a hawkish tone, saying that the Japanese economy is picking up.

However, Kuroda has also expressed caution, saying:

‘Economic activity will remain below pre-pandemic levels for the time being’.

In Japanese economic news, today saw the release of the latest Eco Watchers Survey for the economic outlook in April.

The figure fell below forecasts from 49.8 to 41.7, dampening confidence in the Japanese economy.

Masaki Kuwahara, senior economist at Nomura Securities, commented on the report:

‘Household sentiment turned out particularly weak as more and more people have refrained from unnecessary outings and shopping.’

Looking ahead, the Japanese Yen (JPY) could begin to shed its gains against the Pound this week if the outlook for the Japanese economy continues to worsen.

Added to this, the Pound (GBP) is expected to rise on growing confidence in the UK economy ahead of 17 May, when England is due to further ease lockdown measures.
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