GBP JPY

GBPJPY Currency pair flag

Latest GBP JPY Analysis and Forecasts

Hesitant: Caught between FOMO rally and second wave worries

Macroeconomic/ geopolitical developments

  • The strong “risk on” phase from mid-May into early June has stalled, and although last week saw a bounce it also produced another stall, to leave a hesitant more cautious tone across global financial markets into latter June.
  • The Federal Reserve in the US has given further support to credit markets over the past week, but this has not been enough to fully reenergise the “risk on” theme.
Fed
  • Moreover, Jerome Powell again gave a somewhat downbeat outlook for US economy into the second half of 2020, in the past week his testimony to Congress.
  • This echoed the statement from mid-June from the Federal Open Market Committee (FOMC), where concerns were voiced about the deeper impact to the US economy from the lockdowns in the wake of the COVID-19 virus.
Covid 19 cases
Apple closes stores
  • There has also been a new coronavirus outbreak in Beijing.
  • European nations and most US States are continuing to relax lockdown rules and restart their economies.
  • The Bank of England added £100 billion to their bond buying program as expected, which saw the Pound slightly lower.

Global financial market developments

  • The robust May-June bull rallies in world share averages have stalled since mid-June (after the FOMC meeting) with most indices unable to retest the mid-June peaks.
  • In the Forex space, the US Dollar remains strong alongside an even stronger Japanese Yen, maintaining safe haven bids with the further easing of the “risk on” theme.
  • The Euro and the Pound Sterling have been the main casualties amongst the major currencies, with notable setbacks against both the greenback and Yen (GBPUSD, GBPJPY, EURUSD and EURJPY lower)
gbpusd chart
eurusd chart
  • In the commodity world, Oil and Copper have pulled back from multi-month peaks, though Oil has tried to push back towards its recent high.

Key this week

  • Central Bank Watch: People’s Bank of China (PBoC) interest rate decision on Monday and the Reserve Bank of New Zealand (RBNZ) meeting and statement on Tuesday.
  • On the macroeconomic data side on Tuesday we get global Markit Flash Purchasing Managers Index (PMI) for Manufacturing, Services and Composite, the German IFO survey is released Wednesday, US Gross Domestic Product (GDP), Personal Consumption Expenditure (PCE) and Durable Goods are posted on Thursday and on Friday we get Japan Consumer Price Index (CPI) and Michigan Consumer Sentiment.
  • Deaths from and new cases of the COVID-19 coronavirus will remain in focus with particular concerns about a second wave in some US States.
DateKey Macroeconomic Events
22/06/20PBoC interest rate decision
23/06/20Global Markit Flash PMI (Manufacturing, Services and Composite)
24/06/20RBNZ meeting and statement; German IFO survey
25/06/20US GDP, PCE and Durable Goods
26/06/20Japan CPI and Michigan Consumer Sentiment

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GBP JPY Currency Converter

Other major currency pairs


BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
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GBP/JPY – Live and Historical Rates

Nicknamed the “Geppie”, the GBP/JPY pair is not a major pair or a commodity one, despite the fact that the currencies that make it up are both majors. The chart above is an illustration of the amount of Japanese Yen required to purchase a British Pound.  

The GBP

The GBP is the 4th most traded currency in the world, behind the USD, the EUR and the JPY. It is also the oldest currency still in circulation today and one of the strongest value-wise. The strength of the GBP stems from the strength of the economies Britain trades with, but also from the size of the British economy. Much more than a national currency, the GBP has become over the years one of the symbols of British sovereignty. Since the country decided to exit the EU, the Pound has become much more volatile, though its status has been solidified by Brexit.

The JPY

A popular reserve currency, the Japanese Yen is also the world’s third most traded currency, behind the USD and the EUR. The JPY used to be pegged to the USD, though since 1973, it has been floating. It hasn’t required major interventions since. The economy powering the JPY is the second largest in the world. Since 1990, JPY interest rates have been kept low, which turned the currency into an attractive target for carry trading. While Japan exports silver, gold and magnesium, its economy is dependent on imported raw materials, such as copper, iron ore and bauxite.

GBPJPY Analysis

The reason why the GBP/JPY is not a major pair is that there is very little direct trade taking place between the two countries and the actual GBP/JPY forex trading volumes are mostly realized through the US – a major partner for both countries. The GBP/JPY pair may still make a decent vehicle for carry trades.

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