Key Moments
- GBP/JPY hovered around 212.60 after rebounding from an intraday low near 212.23, following earlier losses in the European session.
- Japan’s Finance Minister Satsuki Katayama warned against “speculative FX moves” and emphasized a readiness to “take decisive steps on forex.”
- UK Retail Sales fell 0.4% month-over-month in February, while annual growth eased to 2.5%, offering limited support to the British Pound.
GBP/JPY Holds Steady as Yen Gains on Intervention Talk
GBP/JPY was little changed on Friday, stabilizing after an earlier slide as renewed concerns over potential foreign exchange intervention supported the Japanese Yen. The cross traded flat after slipping in the European session, with the Yen firming while USD/JPY remained close to the closely watched 160.00 level, an area that previously drew a policy response from Japanese authorities.
At the time of writing, GBP/JPY was quoted around 212.60, having recovered from an intraday trough near 212.23.
Japanese Officials Highlight FX Vigilance and Policy Outlook
Intervention fears intensified after Japan’s Finance Minister Satsuki Katayama stated that authorities are “monitoring market developments with high vigilance.” She pointed to “speculative FX moves driven by Oil prices” and noted that a G7 finance ministers’ meeting will be held, underscoring a willingness to “take decisive steps on forex.”
Separately, the Bank of Japan (BoJ) updated its estimate of Japan’s natural rate of interest, now seeing it in a range of -0.9% to 0.5%, compared with a previous estimate of -1.0% to 0.5%. The BoJ indicated that this upward shift reflects better potential growth in the economy and stronger risk appetite among market participants.
Adding to the hawkish undertone, former BoJ Governor Haruhiko Kuroda said the ongoing Iran war could hasten, rather than postpone, the pace of interest rate increases. He commented that Japan is on a stable growth trajectory, which in his view reduces the need for continued monetary easing. Kuroda also remarked that there would be no issue with raising the policy rate three to four times through next year, which could bring it to around 1.5%.
UK Retail Sales Soft, Offering Only Modest Support to GBP
UK data provided only limited backing for the British Pound. Retail Sales declined 0.4% month-over-month in February, a smaller drop than expectations for a 0.8% fall, after a 2.0% increase in January.
On a yearly basis, Retail Sales rose 2.5%, slightly above projections of 2.1%, but down from 4.8% previously. Excluding fuel, Retail Sales also slipped 0.4% month-over-month, again better than the anticipated 0.8% decline, following a 2.2% rise in January. Year-over-year, Retail Sales excluding fuel advanced 3.4%, easing from 5.9%.
Japanese Yen Performance Against Major Currencies
The Japanese Yen showed broad strength, particularly against the British Pound. The table below outlines the percentage changes of JPY versus major currencies today, along with cross-moves among the G10 currencies.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.25% | 0.06% | 0.01% | 0.02% | 0.07% | 0.10% | |
| EUR | -0.03% | 0.23% | 0.02% | -0.04% | -0.02% | 0.05% | 0.08% | |
| GBP | -0.25% | -0.23% | -0.19% | -0.27% | -0.25% | -0.18% | -0.15% | |
| JPY | -0.06% | -0.02% | 0.19% | -0.05% | -0.05% | 0.01% | 0.06% | |
| CAD | -0.01% | 0.04% | 0.27% | 0.05% | 0.01% | 0.09% | 0.11% | |
| AUD | -0.02% | 0.02% | 0.25% | 0.05% | -0.01% | 0.07% | 0.09% | |
| NZD | -0.07% | -0.05% | 0.18% | -0.01% | -0.09% | -0.07% | 0.03% | |
| CHF | -0.10% | -0.08% | 0.15% | -0.06% | -0.11% | -0.09% | -0.03% |
The heat map shows percentage moves of major currencies relative to one another. The base currency is taken from the left-hand column, and the quote currency from the top row. For instance, selecting the Japanese Yen as the base and moving across to the US Dollar cell gives the percentage change for JPY (base)/USD (quote).
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