GBP/JPY: the macro gap
On the Macro Currency Strength Meter, the British Pound scores -14 and the Japanese Yen scores +20 — a gap of 34 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
-34.0
Stronger side
JPY
Edge is
Narrowing
Scores
-14 vs +20
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 | -82.6 |
| Growth | — | +49 | -49.0 |
| Positioning | -6 | -15 | +8.1 |
| Risk Mood | +8 | -39 | +46.3 |
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