British Pound rebounds swiftly from one-month low against broadly weaker Yen
- GBP/JPY attracts some buyers on Friday, snapping a two-day losing streak to a one-month trough.
- Japan’s fiscal woes counter more hawkish BoJ bets, undermining the JPY and supporting the cross.
- A modest GBP strength also contributes to the intraday recovery, though the upside seems limited.
The GBP/JPY cross stages a goodish intraday recovery from the vicinity of the 210.00 psychological mark, though it remains on track to register heavy weekly losses. Spot prices climb to the 211.80 area during the early European session on Friday and, for now, seem to have snapped a two-day losing streak to a one-month low, touched the previous day.
As investors price in a more hawkish Bank of Japan (BoJ), persistent worries about Japan's worsening fiscal conditions prompt some selling around the Japanese Yen (JPY). In fact, Japan's initial general-account budget requests are estimated to total around ¥143 trillion (about $894 billion), marking a record high for the fourth consecutive year. This comes amid doubts over Prime Minister Sanae Takaichi's ability to balance fiscal responsibility amid her ambitious investment strategy, which keeps a lid on the JPY and triggers an intraday short-covering move around the GBP/JPY cross.
Furthermore, borrowing costs in Japan will remain significantly lower than in other major economies despite expectations for a faster BoJ policy tightening, which, in turn, keeps the so-called JPY carry trade active. The British Pound (GBP), on the other hand, attracts some follow-through buying and is seen as another factor supporting the GBP/JPY cross. That said, reduced bets for an interest rate hike at the Bank of England's (BoE) September meeting might cap the GBP, making it prudent to wait for strong follow-through buying before confirming that the cross has bottomed out.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.16% | 0.31% | -0.00% | -0.04% | -0.17% | 0.11% | |
| EUR | 0.02% | -0.15% | 0.33% | 0.04% | -0.04% | -0.13% | 0.12% | |
| GBP | 0.16% | 0.15% | 0.47% | 0.19% | 0.09% | 0.02% | 0.27% | |
| JPY | -0.31% | -0.33% | -0.47% | -0.29% | -0.36% | -0.46% | -0.21% | |
| CAD | 0.00% | -0.04% | -0.19% | 0.29% | -0.06% | -0.18% | 0.08% | |
| AUD | 0.04% | 0.04% | -0.09% | 0.36% | 0.06% | -0.10% | 0.14% | |
| NZD | 0.17% | 0.13% | -0.02% | 0.46% | 0.18% | 0.10% | 0.25% | |
| CHF | -0.11% | -0.12% | -0.27% | 0.21% | -0.08% | -0.14% | -0.25% |
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).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
