Today's headlines: JPY stops weakening as BOJ intervention discussed | GBP calm 10 days before UK election

JPY stops weakening as BOJ intervention discussed

The GBP/JPY exchange rate hit fresh highs overnight but then stopped dead in its tracks as the markets discussed whether the Bank of Japan had been intervening to support the Japanese Yen. You have to look all the way back in the charts to mid 2008 to find the last time the GBP/JPY rate hit JPY 202.15.? This pair did reach that level overnight before dipping nearly 50 basis points but it has risen again. Japan’s most senior currency diplomat, Masato Kanda, has voices of support for further intervention to curb further Yen weakness. JPY buyers may be seeing a fleeting opportunity.

GBP calm 10 days before UK election

Big political changes have a tendency to weaken the local currency. Oddly though, with just ten days to go before the UK parliamentary elections, sterling is holding its own. That is also in spite of lacklustre purchasing managers indices, which were released on Friday. Although the UK manufacturing PMI was a smidgen higher at 51.4, a fall in the service sector index from 52.9 in May down to 51.2 in June, was enough to stifle any GBP buying interest. On balance, the eurozone PMI's were even worse , manufacturing sector being very pessimistic. The week ahead is light on UK data we will get the economic growth figures on Friday and there is always the possibility of a surprise in the revisions. However, the greater driver for the pound is likely to be the run up to the elections with the polls suggesting a fairly disastrous outcome for the conservative party and a battle between the opposition Labour Party and the newly formed Reform Party. As at this morning, the GBP will buy USD 1.2650 and EUR 1.1810 in the interbank market.

Today's Major Economic Releases?

17:00 CAD BoC's Governor Macklem speech???

?Interbank Exchange Rates?

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