GBP/JPY touches fresh 16-year high for fourth day in a row

The Yen’s decline continues, as the GBP/JPY pair rises to all-time highs. Japanese policymakers issue more pointed warnings in response to the collapsing JPY. Given the continued huge rate differential, market flows are unlikely to change.

Wednesday saw the GBP/JPY pair achieve a record 16-year high, the fourth day in a row that the Guppy has done so while the Japanese Yen keeps falling. As investors wait for concrete policy changes from the Bank of Japan (BoJ) and the Japanese Ministry of Finance, increasingly severe warnings from Japanese policymakers regarding the rate of the Yen’s drop have yielded very little.

Masato Kanda, Japan’s Vice Finance Minister noted early Wednesday that he has “serious concern about the recent rapid weakening of the yen”, within Kanda continuing that he and the MoF are closely monitoring market trends with a high sense of urgency”. Kanda ended with saying that “we will take necessary actions against any excessive movements.”

GBP/JPY briefly softened to 202.40 before Guppy traders promptly responded by pushing the pair to a fresh 16-year high at 203.15.

With Japanese Retail Trade data expected early on Thursday, the second part of the trading week begins with a plethora of important data for both Japan and the UK. Later in the day, the Bank of England (BoE) will release its most recent Financial Stability Report, which will cause Yen pairings to reposition in anticipation of the latest Japanese Tokyo Consumer Price Index (CPI) inflation data, which is anticipated early on Friday. To close out the trading week, the Gross Domestic Product (GDP) for the UK’s first quarter will be updated.