GBPJPY Pound Sterling vs Japanese Yen

The pound weakened against its major counterparts in early European deals on Friday, as European shares slipped on worries over trade war after U.S. President Donald Trump said the United States would impose tariffs on steel and aluminium imports.

Investors are worried that retaliatory action by U.S. trade partners could result in a potential trade war.

Comments from the Bank of Japan governor Haruhiko Kuroda about exiting easy policy also made investors nervous.

"The members of the policy board and I think that prices will move to reach 2 percent in around fiscal 2019," Kuroda told parliament. It will be natural to think about and debating exit at that time, he added.

The U.K. Prime Minister Theresa May is set to deliver speech on Britian's future relationship with the Union later in the day.

Investors fear over the likelihood of a Hard Brexit, especially after EU proposed harsh stance on the trade deal and Irish border issue.

Survey data from IHS Markit showed that the UK construction sector continued to expand at a subdued pace in February.

The construction Purchasing Managers' Index rose to 51.4 in February from a 4-month low of 50.2 in January.

The pound traded mixed against its major rivals in the Asian session. While it fell against the yen and the franc, it rose against the greenback. Against the euro, it held steady.

The pound slipped to 0.8929 against the euro, its weakest since January 12. The pound is likely to find support around the 0.91 level.

Data from Eurostat showed that Eurozone producer price inflation eased in January on energy prices.

Producer prices advanced 1.5 percent year-on-year, slower than the 2.2 percent increase logged in December. Prices were expected to climb 1.6 percent.

The pound dropped to 145.19 against the yen, a level unseen since September 2017. The pound is seen finding support around the 142.00 mark.

Data from the Ministry of Internal Affairs and Communications showed that the unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in January.

That was well beneath forecasts for 2.8 percent, which would have been unchanged from the December reading.

The pound weakened to a 4-1/2-month low of 1.2884 against the Swiss franc, compared to 1.2969 hit late New York Thursday. On the downside, 1.27 is seen as the next support level for the pound.

On the flip side, the pound extended rally to a 2-day high of 1.3809 against the greenback from yesterday's closing value of 1.3775. If the pound rises further, it may find resistance around the 1.40 mark.

Looking ahead, Canada GDP data for December and University of Michigan's final consumer sentiment index for February are scheduled for release in the New York session.

Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Mar 2024 to Apr 2024

Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Apr 2023 to Apr 2024