GBP/JPY jumps to near 214.00 as Yen gives back some Japan intervention-led gains

GBP/JPY rises to near 214.00 as the Japanese Yen surrenders some gains driven by Japan’s intervention.
Tokyo CPI ex. Fresh Food growth cooled down to 1.5% YoY in April.
BoE’s Bailey clarifies that the central bank will act if it finds there might be second-round effects of inflation.

Sagar Dua FXStreet

The GBP/JPY pair is up 0.35% at around 214.00 during the Asian trading session on Friday. The pair trades higher as the Japanese Yen (JPY) surrenders a majority of its Thursday’s gains, which were driven by Japan’s intervention in forex markets to counter one-way speculative moves against the domestic currency.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.02%	0.03%	0.35%	0.00%	0.13%	0.22%	0.03%
EUR	-0.02%		0.00%	0.31%	-0.04%	0.11%	0.18%	0.00%
GBP	-0.03%	-0.00%		0.30%	-0.03%	0.09%	0.17%	0.02%
JPY	-0.35%	-0.31%	-0.30%		-0.33%	-0.22%	-0.16%	-0.31%
CAD	-0.01%	0.04%	0.03%	0.33%		0.11%	0.20%	0.04%
AUD	-0.13%	-0.11%	-0.09%	0.22%	-0.11%		0.08%	-0.06%
NZD	-0.22%	-0.18%	-0.17%	0.16%	-0.20%	-0.08%		-0.15%
CHF	-0.03%	-0.00%	-0.02%	0.31%	-0.04%	0.06%	0.15%

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).

According to a report from Reuters, Japan intervened to prop up the JPY against the US Dollar (USD) on Thursday, its first official currency action in nearly two years.

Japan Finance Minister (FM) Satsuki Katayama also said on Thursday that they are moving closer to taking decisive action in the foreign exchange markets.

Meanwhile, Tokyo’s Consumer Price Index (CPI) ex. Fresh Food data for April has come in lower than expected. The underlying inflation growth cooled down to 1.5% Year-on-Year (YoY) from 1.7% in March, while it was expected to arrive higher at 1.8%.

In the Asian trade, the Pound Sterling (GBP) trades higher against its major currency peers, except the Canadian Dollar (CAD), as the Bank of England (BoE) has opened the room for an interest rate hike if the energy supply shock continues to persist.

On Thursday, the BoE left interest rates unchanged at 3.75%, as expected, and Governor Andrew Bailey warned that second-round effects of energy crisis-led inflation could arise, but the central bank would not wait and act early. “It would be a mistake to wait to see the second-round effects before acting because then it would be too late,” Bailey said in the press conference, Reuters reported.

Economic Indicator

Tokyo CPI ex Fresh Food (YoY)

The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region excluding fresh food, whose prices often fluctuate depending on the weather. The index is widely considered as a leading indicator of Japan’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

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