The GBPJPY pair is popular with traders. The British pound and the Japanese yen represent some of the strongest economies on the planet.
The GBPJPY pair is popular with traders. The British pound and the Japanese yen represent some of the strongest economies on the planet. The pound sterling is the national currency of United Kingdom and is issued by the Bank of England.
The pound exchange rate largely depends on the relationship between the United Kingdom and the European Union. Even after Brexit, the European Union remains the main sales market for England. The economic situation in Europe impacts Britain's GDP, industrial production, employment and other macroeconomic indicators. The GBP is closely correlated with the euro and Swiss franc. Therefore, when trading the British currency, traders will have to look not only at the news of the monetary and state policy of the UK, but also look at the similar data from the EU. Interest rate changes are also important for the pound, as are the comments of the authorities accompanying these decisions. The national currency of the United Kingdom is influenced by the cost of commodities as well. Typically, GBP traders often monitor the prices of oil, natural gas and grains. Changes in their value can signal inflationary pressures on the UK economy and, therefore, on the British pound.
The yen is the Japanese national currency. It is issued by the Bank of Japan. For several decades, the yen was considered the third most important reserve currency, but later its role declined, giving way to the British pound. The JPY rate depends on the country's monetary policy. The Department of Economy, Industry and Trade is committed to making the yen cheaper compared to the pound sterling, euro, Canadian and US dollars and other currencies. These measures are aimed at increasing the competitiveness of Japanese manufacturers in the world market. The leadership of Japan maintains one of the lowest interest rates on the planet in order to increase business activity in the country. Decisions on changes in interest rates are important for the yen, as is the publication of data on the country's GDP, unemployment rate, industrial production and other macroeconomic indicators. Also, the Japanese government is trying to regulate the volume of imports and exports. This type of control largely defines the cost of Japanese goods and the cost of their manufacture, which also affects the yen rate.
Why is the GBPJPY pair so popular on Forex? This is largely due to its high volatility. Traders can make good profits within the day. The instrument has high liquidity with the pound-yen pair being actively traded during three trading sessions: Asian, European and American. Due to the difference in interest rates, this currency pair is often used in carry-trade strategies. The GBPJPY rate is strongly influenced by fundamental factors: government decisions, introduction of new trading rules, publication of news important for fundamental analysis, etc.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
