Analyse the sterling pound/yen currency pair rate (GBP/JPY)

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Are you thinking of investing or maybe you already invest in the Forex market and wish to obtain more information on the GBP/JPY currency pair? Through this detailed and dedicated article we offer you the opportunity to learn more about this currency pair through our presentation of these two currencies as well as information that will assist you in completing pertinent fundamental and technical analyses.  

Elements that can influence the price of this asset:

Analysis N°1

Firstly we would of course recommend you read all communications and publications from the central banks responsible for the issue and regulation of these two currencies, this is the BOJ or Bank of Japan for the Yen and the BOE, or Bank of England for the sterling pound. These two central banks are in fact not only responsible for issuing these currencies, they are also responsible for their interest rates. Meetings of these banks are particularly monitored as they determine the monetary policies of these currency zones and thereby determine the appeal levels of these currencies for investors according to the interest rates they apply.

Analysis N°2

We would also of course monitor the data relating to the economic health of Japan and the United Kingdom, notably that relating to commercial trade with other countries around the world. Information on the imports and exports will clearly exert an influence on the use of these two currencies in these trades. Other important figures should be taken into consideration such as the unemployment rates, the inflation levels, consumer confidence, the GDP rate and the consumer price index.

Analysis N°3

Finally, it is of course important to take into account all events, whether economic, political or environmental, that could positively or negatively influence the economic growth of these two countries.

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General presentation of the GBP/JPY currency pair:

Initially we shall take a close look at this particular currency pair on the Forex market and its particular characteristics.

The GBP/JPY currency pair represents of course the currency exchange rate between the sterling pound and the Japanese Yen. Basically, it expresses the value of a single sterling pound in Japanese Yen.

Concerning the basic currency of this currency pair it is therefore the sterling pound, also called the ‘cable’ in the trading world, which is currently the fourth most traded currency throughout the world. The issuing bank is the Bank of England, or BOE.

The GBP or sterling pound is often used as a reserve or safe currency and is characterised by a relatively high value compared to other major currencies.

Regarding the countering currency of the GBP/JPY currency pair, it is the Japanese Yen which is the third most traded currency on the foreign exchange market. It is the Bank of Japan, or BOJ, that is responsible for its issue and regulations.

The Japanese Yen has the particularity of being considered as a refuge currency as the Japanese economy displays a low inflation rate and a strong stability. It is also characterised by a relatively low value as compared to other major currencies, notably due to the fact that the interest rates are also relatively low. This currency is important, particularly for commercial operations and transactions in Asia and represents high transaction volumes.

It is also important to remember here that a low exchange rate of the Japanese national currency the Yen has always been historically favoured by the country’s government which wished to boost the country’s exports and thereby favour the country’s economy and its growth.


How to complete a technical analysis on the GBP/JPY currency pair exchange rate?

Apart from completing this crucial fundamental analysis on the GBP/JPY currency pair exchange rate it is of course also advisable to complete a technical analysis of this currency pair.

Here the technical analysis is a method of study and evaluation based on market dynamics which studies the historical rates.

The objective of the technical analysis is therefore to predict the rate dynamics of this currency pair in the future using certain tools called technical indicators which are in fact statistical type tools. There are various techniques and methods that exist for the calculation of this currency pair’s volatility, the strength of the trend and the probable trend reversal or acceleration levels. These include the Bollinger Bands, the support and resistance levels, the pivot points, the moving averages, and the RSI indicator among others.

Frequently Asked Questions

Where and how to invest in the GBP/JPY exchange rate?

Speculation on the currencies and currency exchange rates such as that of the GBP/JPY are completed on a single market called the Forex, or foreign exchange market. For this type of investment you can use the online brokers that enable you to speculate on the rising or falling movements of these exchange rates depending on your trading strategy.

Which entities issue the sterling pound and the Japanese Yen?

It is of course the central banks that are responsible for the issuing of currency in any and every country. For the sterling pound this is the Bank of England, or BOE, that is responsible and for the Yen it is the BOJ, or Bank of Japan. These central banks also determine the interest rate for each currency.

Is the GBP/JPY a major currency pair?

Yes! The GBP/JPY currency pair is indeed a major currency pair on the Forex market given that it is composed of two currencies with high transaction volumes on the market. The sterling pound is the fourth most traded currency worldwide and the Japanese Yen holds third position in worldwide exchange.

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