Derek Taylor recommends ¥150.00 target rate on Japanese Yen “Forward Orders”

Derek Taylor, our very own foreign exchange expert, is recommending that Travel Money Club members buying Japanese Yen this week should target their “Forward Orders” at ¥150.00 for a great deal.

The “Forward Order” feature is exclusive to Travel Money Club and allows members to automatically buy currency when their target exchange rate is reached. They simply tell the us what currency to buy, what exchange rate to buy at, and the payment card to use. Then if and when the target exchange rate is reached, we automatically execute the order and deliver next business day* (for orders completed by 1pm). As it all happens in the blink of an eye, even if your target rate is only achieved for a couple of minutes, we will still execute your order! Here we explain the latest news about buying Japanese Yen.

Derek told us:

The Japanese Yen is not a currency that many people look at in the UK, but more are going to Japan both on business and on holiday.

It is one of the most volatile currency pairs in the World and very difficult to predict.

The GBP/JPY story is one of two very different economies, driven by different events. The important facts to note are:

  1. Between December 2012 and August 2015, the Yen fell against the Pound by 50%, with the GBP/JPY exchange rate moving from 130.00 to 195.00. In effect one pound buys you 50% more Japanese yen. But remember this is NOT a strong pound, but a heavily weakening Yen.
  2. The surprise “Brexit” vote in the UK sent Sterling into a tailspin, clearly seen here. But look at Japan. When a country seeks to weaken the value of its currency, then its exports become cheap on the world market, thus boosting market share, although some say, unfairly! So the GBP/JPY currency pair encapsulates both the weakness of sterling, coupled with a strengthening Yen (through export earnings). This “double whammy” sent GBP/JPY crashing back down to 130.00 again.

Today – Monday 19th March 2018

It is a good day for the Pound as a Brexit Transition agreement is signed. But things for the Japanese Prime Minister are not looking good.

There is building concern over the future of Japanese PM Shinzo Abe. He has become embroiled in several scandals, the worst of which is the “land sale” scandal, which involves the sale of state owned land  at well below market value to operators with ties to the Abe family. Mr. Abe has been the proponent of “Abenomics”, which has led to the weakening of the Japanese Yen, boosting exports. If he is forced out of office, the Yen could well strengthen considerably, forcing the USD/JPY lower. This may negatively impact the Dollar further against other currencies.

If Shinzo Abbey does go, then there is a good chance that the “weak yen” policy that bears his name, may well be wound down. In Sterling terms we could see the Pound buying less Yen. Today it buys 150 JPY, but we could possibly see 130, or even 120 to the Pound. But currency markets are fickle, and there has already been Yen strength in anticipation. There is a crisis brewing, so expect movement.

 

ABOUT DEREK TAYLOR

Derek is Director and Co-Founder of the Travel Money Club, as well as CEO of Taylor Associates (International) Ltd, one of the City of London’s foremost financial and market training organisations. Taylor Associates was established in 1993, specializing in derivatives, capital markets, risk and treasury training. He has personally trained in banks, brokers, asset managers, hedge funds and corporations both in the UK and overseas.

Derek’s career started in Midland Bank Group Treasury working across a broad product range including Money Markets, Foreign Exchange, Equity and Fixed income. He rose to the level of senior Director, before moving to Lehman Brothers, and then Bank of America working both in London and NY.

Derek has primarily worked as a trader, both inter-bank and proprietary, but has also spent some years as an inter-bank broker, running desks at two of the world’s leading brokerage houses, Tullett Prebon and Harlow Butler Savage (now part of the ICAP group).

Derek is a frequent speaker on Financial Markets subjects all over the World, and is an Associate of the Chartered Institute of Bankers (ACIB), a member of the Forex Association (ACI), and a member of the Society of Technical Analysts (MSTA).

* Please note that a small number of currencies are not available for next business day delivery. The actual delivery date will be clearly displayed in your order acknowledgement.

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