The pound is on its best run against the Japanese yen in three years

 
Billy Bambrough
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The Japanese yen is seen as a safe haven currency in times of crisis (Source: Getty)

Sterling is on course for its best performance against the yen in over three years after Theresa May was named as the successor to Prime Minister David Cameron.

A 1.9 per cent rise for the pound sent it to a one-week high of $1.3246, while against the safe haven Japanese yen sterling climbed almost four per cent to 138.66 yen. The rise is it's best performance since April 2013, though it still pales against its fall last month.

The pound dropped by around 12 per cent against yen on 24 June, when the Brexit vote was announced.

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The pound also strengthened 1.7 per cent to €83.64, a one-week high, extending gains from yesterday.

Despite last seeing these prices just seven days ago the sudden climb means sterling is on track for its biggest daily gain since the shock vote for Brexit sent the pound to lows not seen since the Thatcher era more than 30 years ago.

The pound hit a 31-year low of $1.2798 last week.

The certainty and confidence May's appointment gave to markets over the UK's stability sent the pound soaring, however the international looking FTSE 100 suffered as a result.

The FTSE 100 is made up of international companies that often benefit from a weaker pound.

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After May's closest rival Andrea Leadsom withdrew from the race yesterday, May was left as the only candidate to be leader. Despite campaigning for the UK to remain with the European Union trading bloc May has said she will lead the country out of the Union, saying "Brexit means Brexit".

She said she will set up a new government department to lead the process, which is expected to take two years from the formal announcement that the UK wants to leave – known as Article 50.

The market will now turn its attention to the Bank of England and its governor Mark Carney who will on Thursday decide whether to cut the UK's benchmark rate of interest.

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