GBP/JPY – Crucial forex trading data rundown

The GBP/JPY pair is a cross-continent forex pair pitting the pound sterling (more commonly, British pound) and Japanese yen. Since it isn’t a US pairing, it doesn’t fall into the FX majors category, even if it does contain currencies from two significant economies. Instead, GBP/JPY is a minor pair, along with other non-USD major economy pairs.

The following pairs comprise the forex minors group:

• EUR/GBP – Euro/British Pound
• EUR/CHF – Euro/Swiss Franc
• EUR/JPY – Euro/Japanese Yen
• GBP/JPY – British Pound/Japanese Yen
• CHF/JPY – Swiss Franc/Japanese Yen
• AUD/JPY – Australian Dollar/Japanese Yen
• CAD/JPY – Canadian Dollar/Japanese Yen
• NZD/JPY – New Zealand Dollar/Japanese Yen
• AUD/NZD – Australian Dollar/New Zealand Dollar
• AUD/CHF – Australian Dollar/Swiss Franc
• GBP/CHF – British Pound/Swiss Franc
• CAD/CHF – Canadian Dollar/Swiss Franc

Every forex pair is comprised of a base currency, the first one mentioned in the pair, and a quote currency, the second. The value of each forex pair, regardless of whether it’s a major, minor currency pairs, or exotic, hinges on the interaction between these two currencies.

When does the GBP/JPY value change?

The forex market is open 24/5, so the window when things are changing is fairly wide. Additionally, since small adjustments are happening constantly, the value of a pair is always in motion.

However, since GPB/JPY is a fairly significant pair with two major economies using the currencies, the changes aren’t as significant as they can be with, for instance, exotic pairs.

As we mentioned, the value of a pair is dictated by its base (GBP) and quote (JPY) currencies. When the base currency outperforms the quote, the price rises, and vice versa. This, however, may make you think that the GBP/JPY pair can’t climb if Japan’s economy is doing well. That isn’t true; if the British economy outperforms it, the value will increase.

Additionally, it’s important to note that different pairs have different trading activity peaks. In this case, there are two vastly different time zones. Below, we’ll note some key periods of activity to look out for.

London Session (8:00 AM – 4:00 PM GMT)

Often a session where the GBP/JPY sees a lot of attention. The London market is one of Europe’s most significant financial hubs and GBP especially shows considerable movement.

Tokyo Session (12:00 AM – 9:00 AM GMT)

Conversely, during Tokyo’s trading hours, the JPY sees more price movement. Overall, while it’s also an active time, it’s less volatile than London’s trading hours. As such, it may be better for traders who prefer steadier movements.

Tokyo-London Overlap (7:00 AM – 9:00 AM GMT)

The small period when the markets are open in both of the pair’s regions is significantly active. Traders often see new breakouts and liquidity and volatility can become high as traders prepare for London’s opening and for the hour when it overlaps with Tokyo.

London-New York Overlap (12:00 PM – 4:00 PM GMT)

While New York doesn’t use either the GPB or JPY, it’s still the largest market. As such, a lot of unrelated pairs show significant activity when their hours overlap with New York.

Traders may want to give special attention to the opening hours of all the markets we mentioned, as that’s often when some tension on the pair is released, leading to significant changes.

Reports to follow for GBP/JPY

Financial reports and releases by government entities are also significant to follow for forex traders interested in GBP/JPY. These reports concern key statistics and financial plans for the pound and yen. We’ve outlined the five most significant reports for both:

British Pound (GBP)

Gross Domestic Product (GDP) Report – Office for National Statistics (ONS)

• What it represents: Shows GDP – a measure of total economic output.
• Frequency: Monthly estimates (6 weeks after the month ends) and quarterly reports (about 2 months after the quarter ends).

Consumer Price Index (CPI) Report – ONS

• What it represents: The CPI is the primary inflation indicator.
• Frequency: Monthly, released around the third week after the reference month.

Unemployment Rate & Labour Market Report – ONS

• What it represents: The number of people in the labour force and pay growth.
• Frequency: Monthly, typically six weeks after the reference period.

Bank of England (BoE) Monetary Policy Summary – Bank of England (BoE)

• What it represents: BoE’s decisions on monetary policy and inflation.
• Frequency: Every six weeks (8 times per year).

Balance of Payments Report – ONS

• What it represents: UK’s trade balance
• Frequency: Quarterly, about 40 days after the quarter ends.

Japanese Yen (JPY)

Gross Domestic Product (GDP) Report – Cabinet Office of Japan

• What it represents: Same as the UK, the GDP measures total economic output.
• Frequency: Quarterly, released about 45 days after the quarter ends.

Tokyo Core Consumer Price Index (CPI) Report – Statistics Bureau of Japan

• What it represents: Inflation in Tokyo.
• Frequency: Monthly, released before the national CPI.

Tankan Survey (Business Confidence Report) – Bank of Japan (BoJ)

• What it represents: Business sentiment in significant companies.
• Frequency: Quarterly, released in March, June, September, and December.

Bank of Japan (BoJ) Monetary Policy Statement & Interest Rate Decision – Bank of Japan (BoJ)

• What it represents: BoJ’s inflation and monetary policy stance.
• Frequency: 8 times per year.

Trade Balance Report – Ministry of Finance (MoF)

• What it represents: Trade balances focusing on exports vs imports.
• Frequency: Monthly, typically released three weeks after the reference month.

It’s also important to remember that while the BoE and ONS impact GBP the most, there are also smaller reports from other constituent countries. For experienced forex traders and those trying to form a clearer picture, these reports may provide crucial insight.

GBP/JPY recent developments

To wrap up, we’d like to give you a rundown of some recent developments affecting the pair.

• JPY expands near a five-month high but deflates due to a positive risk tone in a Chinese stimulus announcement.
• Losses were limited due to geopolitical risks, mostly from the US, and an expected BoJ interest rate hike.
• Confidence in the yen seems low due to poor recent performance and Rengo, Japan’s largest trade union group accepting a lower average pay hike than expected.
• The GBP, meanwhile awaits in tension of an upcoming monetary policy report from the BoE.
• It has recorded incremental gains and has grown most against the JPY (0.73%) during the past week.

Currently, the GBP/JPY pair sits at 192.96.

Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.