GBP JPY Exchange Rate Rallies despite Push for Second Scottish Referendum

The GBP JPY exchange rate advanced on Monday despite the announcement from Scottish First Minister Nicola Sturgeon that she would seek a second independence referendum before the end of Brexit negotiations.
<h2>Pound Japanese Yen (GBP JPY) Rallies as Markets Shrug of Fears of UK Split</h2>

The Pound Japanese Yen (GBP JPY) exchange rate strengthened today as markets largely ignored Sturgeon’s plan to call for a second Scottish independence vote.

Sturgeon is set to claim that the government’s decision to pursue a ‘hard Brexit’ is not in keeping with Scotland’s desire to stay in the single market, with the country having voted overwhelmingly to remain in last year’s EU referendum.

However markets are not so confident that Scotland will vote for independence, after the electorate voted 55-45% to remain part of the UK just a couple of years ago.

Kathleen Brooks of City Index said;

‘The latest opinion polls suggest that a second referendum would go the same way as the first, and the majority of voters would choose to stay in the United Kingdom. While opinion polls still can’t be fully trusted, it’s enough, at this stage, to keep UK markets calm.’

Meanwhile observers suggest that while Theresa May is likely to agree to a second vote she may delay it until after the Brexit negotiations have taken place, forcing Scotland to face the possibility of re-applying to the EU and making it more unlikely that the Scottish voters would be willing to risk going it alone.

<h2>Japanese Yen Falls as Machinery Orders Fall Further than Expected</h2>

The Japanese Yen tumbled during trading today following a worse than expected Machinery Orders Report.

Data showed that Japan’s machinery orders unexpectedly contracted at the start of the year, falling from 2.1% to -3.2% in January after initial forecasts estimated that it would continue to show growth but fall to 0.5%.
Machinery order figures are often used as a leading indicator of capital spending over the coming months, but economists warn about reading too much into the data as it can fluctuate wildly month to month, suggesting that it would be prudent to wait for more data before jumping to conclusions.

<h2>GBP JPY Exchange Rate Forecast: House of Commons to Hold Second Vote on Brexit</h2>

The Pound Japanese Yen exchange rate may slide later this week depending on the outcome of the government’s Brexit bill as it passes through the House of Commons for the second time.

The second vote follow the decision by the Lords to amend the bill as it passed through the upper house last week as peers sought to guarantee than Parliament is given a ‘meaningful’ vote on the final terms of Brexit, with Sterling likely to tumble if the amendment is rejected.

Meanwhile the Yen could retreat further on Wednesday following the latest domestic Industrial Production report, with figures forecast to show that activity fell dramatically at the start of 2017.

<h2>Current Interbank Exchange Rates</h2>

At the time of writing the GBP JPY exchange rate was trending around 140.30 and the JPY GBP exchange rate was trending around 0.0071.