• 23 May 2022

The pound is one of the growth-oriented and riskier investments than the Japanese yen because the Pound is more volatile. A fast-dropping GBP brings risk to the inflation forecast, particularly when important things like energy need to be imported. The falling GBP makes those imported items much more expensive. The British Pound Sterling is the fourth most popularly traded currency, and the third most commonly held reserve currency. The British Pound Sterling represents the economy of The United Kingdom, which consists of England, Scotland, Wales, and Northern Ireland; and the Pound Sterling is the sixth largest currency in terms of GDP, and the 8th largest in terms of Purchasing Power Parity.

The yen is very slow and steady. That's why we call it a safe currency because it will be stable. Stocks and bond yields rising together which makes it difficult for the Japanese currency to shine. Russia’s attack on Ukraine is also one of the things which affected the market. One of the leading causes of JPY weakness is increasing monetary policy divergence between the Bank of Japan and its major counterparts. Japan is a key energy importer; rising prices may have played a role in the Yen’s depreciation. Central banks have been responding to rising global inflation, which seems to be occurring almost everywhere except for Japan.

GBP Fundamental Analysis

  • Public sector net borrowing

If the value is below the previous -17.3 billion Pounds, then it is good for GBP.

  • S&P Global/CIPS Manufacturing PMI Flash

In this reading, if it is above 50 it indicates expansion and if this is above the forecasted value 55.1 and previous value 55.8. This means it is very favorable for GBP. It will result in an uptrend for this pair.

  • S&P Global/CIPS UK Services PMI flash

In this reading, if it is above the value of 50 indicates expansion and if this is above the forecasted value 57.3 and previous value 58.9. Then it will appreciate GBP.

JPY- Fundamental Analysis

  • Coincident Index Fund

Increase in this index is an expansion because this index directly correlated with business cycle.

  • Loading Economic Index Final

Increase in this index is an expansion. Then it will appreciate Yen.

  • Foreign Bond Investment

If it is positive, it indicates net purchase, if it is negative, it indicates selling.

  • Technical Analysis

The daily candle looks bullish and has closed exactly above resistance. Hence there are chances for an upward momentum.

Also Read:- Economical Impact of Ukraine invasion on Russia


- Pruthvi Alva & Aruna