GBP/JPY: the macro gap
On the Macro Currency Strength Meter, the British Pound scores -28 and the Japanese Yen scores +44 — a gap of 72 points in favour of the Japanese Yen. The widest divergence is in positioning, which favours the Japanese Yen. All else equal that gap is a fundamental tailwind for the Japanese Yen against the British Pound — though markets may already have priced much of it in.
Strength gap
-71.5
Stronger side
JPY
Edge is
Widening
Scores
-28 vs +44
Factor by factor
Positive is stronger relative to the other majors, not in absolute terms. The gap column is GBP minus JPY.
| Factor | GBP | JPY | Gap |
|---|---|---|---|
| Interest Rates | -31 | +52 | -83.0 |
| Growth | — | +44 | -43.7 |
| Positioning | -48 | +82 | -129.6 |
| Risk Mood | +5 | -24 | +29.3 |
Advertisement