A significant number of people transfer money from the UK to Japan and in the other direction each year. In 2016, around U.S. $159 million made its way from the UK to Japan as remittances. In the same year, around U.S. $18 million was sent from Japan to the UK. These numbers are only indicative of transfers carried out for personal reasons.
The GBP-JPY currency pair is among the more commonly traded minors. It was the seventh most liquid pair in January 2018, accounting for 5.67% of the total market share. The Japanese yen is most commonly traded with the U.S. dollar, followed by the pound sterling. On the other hand, the pound sterling is most commonly traded with the U.S. dollar, followed by the Japanese yen. The GBP-JPY currency pair is often referred to as Guppy in the forex industry.
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The Pound Sterling
The UK adopted the pound sterling as its official currency way back in 775 AD, which makes it the oldest currency still in circulation. The pound sterling also holds the distinction of being the oldest currency that is still traded actively.
Other than the UK, the pound sterling is also used as the official currency in Jersey, Guernsey, the Isle of Man, South Georgia and the South Sandwich Islands, Tristan da Cunha, and the British Antarctic Territory.
The pound sterling, also commonly referred to as the British pound, was the fourth most commonly traded currency globally in April 2016, accounting for 12.8% of the international forex market turnover. As a reserve currency, it has fallen from its days of glory and is now at number four.
|Nicknames||Quid, pound, bread, moolah, nicker, bones, |
dough, readies, folding stuff, paper
|Bank notes||GBP 1, GBP 5, GBP 10, GBP 50, GBP 100|
|Coins||1p, 2p, 5p, 10p, 20p, 50p, GBP 1, GBP 2|
Japan adopted the yen as its official currency in 1871. Its use alongside other currencies is prevalent in Zimbabwe, where currencies such as the U.S. dollar, the British pound, the euro, the Australian dollar, Chinese renminbi, the Botswana pula, the South African rand, and the Indian rupee also serve as legal tender.
In April 2016, the Japanese yen was the third most traded currency globally, with its share of the international forex market turnover standing at 21.5%. It is also the most liquid and heavily traded Asian currency.
As a reserve currency, the Japanese yen is at the third spot, after the U.S. dollar and the British pound. It overtook the pound sterling to get to number three in 2017.
|Sub unit||1/100 - sen|
1/1000 - rin
|Bank notes||JPY 1000, JPY 2000, JPY 5000, JPY 10,000|
|Coins||JPY 1, JPY 5, JPY 10, JPY 50, JPY 100, JPY 500|
Pound Sterling / Yen Historical Rates
The yen devalued against the pound sterling and U.S. dollar in 1873 upon the devaluation of silver, because they followed the gold standard. In 1897, when Japan adopted the gold standard, the value of one yen was U.S. $0.50. This did not change until 1931, when Japan abandoned the gold standard.
The value of the yen remained fairly steady through the 1930s, at around U.S. $0.20. While the yen took form of a free floating currency from 19325 to 1935, it was then pegged to the pound sterling for the next five years.
The yen suffered significantly after World War II. The yen did not have an exchange system through most part of the 1940s. In 1949, the value of one U.S. dollar was fixed to 360 yen according to the Bretton Woods System.
After the U.S. dollar devalued in 1971, when it stopped using the gold standard, a new fixed exchange rate of U.S. $1 = ¥308 was arrived at based on the Smithsonian Agreement. However, supply and demand pressures faced by the forex markets made the new rates very difficult to maintain. Consequently, Japan, along with several other countries, decided to go the free-float way in 1973.
The 1970s saw the value of the yen swing several times against the pound sterling and U.S. dollar, from USD/JPY = 271 in 1973, to USD/JPY = 300 in 1976, to USD/JPY = 211 in 1978, and to USD/JPY = 227 in 1980. The pattern continued through most part of the 1980s. A change of fortune came after the 1985 Plaza Accord, and by 1988, the USD/JPY pair traded at 128. After a slight lull in 1989 and 1990, it peaked at 123. In April 1995, one U.S. dollar valued at 80 yen.
A downward swing for the Japanese yen came about because of the Japanese asset price bubble, and by 2007 it is estimated the yen undervalued against the euro by around 40%. However, the global economic crisis worked in favor of the yen, with it appreciating against most major currencies. The dollar valued at less than 100 yen from November 2008 to April 2013.
GBP-JPY in the last five years
|GBP 1 =|
|1 July, 2013||JPY 150.002|
|1 July, 2014||JPY 167.301|
|1 July, 2015||JPY 178.565|
|1 July, 2016||JPY 159.697|
|1 July, 2017||JPY 147.589|
GBP-JPY in the last five months
|GBP 1 =|
|1 March, 2018||JPY 147.598|
|1 April, 2018||JPY 148.562|
|1 May, 2018||JPY 149.004|
|1 June, 2018||JPY 144.827|
|1 July, 2018||JPY 145.979|
What Affects GBP / JPY Rates?
If you plan to trade the pound sterling against the Japanese yen, or the other way around, you would actually be trading a derivative of the USD/JPY and GBP/USD pairs. As a result, there is a correlation between the GBP/JPY pair and the USD/JPY and GBP/USD pairs.
Factors that may affect the value of the pound sterling against the yen include changes in monetary policies of both nations, their trade surplus, interest rates set by central banks of both countries, as well as prevailing investor sentiment.
Trading of the Japanese yen is common as a carry traded component. Owing to a low interest rate, the Japanese yen is paired with higher-yielding currencies such as the pound sterling, the Australian dollar, and the New Zealand dollar. The underlying, as a result, can get rather volatile at times.
If you wish to transfer money from the UK to Japan, or if you want to send money from Japan to the UK, remember that the exchange rate you get can have a telling effect on the cost, especially if you plan to transfer a large sum. Since several leading companies facilitate fund transfer between both countries, it is in your best interest to compare your options well.