GBP/JPY: the macro gap
On the Macro Currency Strength Meter, the British Pound scores -7 and the Japanese Yen scores +25 — a gap of 32 points in favour of the Japanese Yen. The widest divergence is in interest rates, 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
-32.4
Stronger side
JPY
Edge is
Widening
Scores
-7 vs +25
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 | -35 | +52 | -86.7 |
| Growth | — | +22 | -21.9 |
| Positioning | +20 | +46 | -26.3 |
| Risk Mood | +11 | -53 | +63.5 |
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