Sterling Rises to the Mid-212s Against Yen After Japan Spending Falls 6.8%
Key Facts
GBP/JPY advanced into the mid-212.00 range during Tuesday’s European session on November 10, 2026, according to an FXStreet report, as the yen weakened after data showed household spending fell 6.8% in real terms year on year in September. The decline was deeper than the market’s average forecast of 3.1% and was the largest since September 2020, according to a Reuters report via Investing.com. This came as the Bank of England tightened policy, raising its interest rate at the meeting that ended on November 4, highlighting the divergence between the two countries’ monetary policy paths. Meanwhile, Japan’s consumption data keep the strength of domestic demand in focus for the Bank of Japan ahead of its next meeting. The pair closed at 212.398 on November 9, compared with 211.473 on November 8, according to EL7 data.
Average monthly consumer spending by Japanese households of two or more people was 289,536 yen in September, according to the Statistics Bureau of Japan. Spending fell 6.8% in real terms compared with September 2025, while it declined 4.5% in nominal terms over the same period. On a seasonally adjusted monthly basis, spending fell 2.8% in September, while the market had expected an increase of 0.3%, according to Reuters. The annual decline thus continued for a tenth consecutive month. These readings point to weak spending in September, despite the differing comparison bases of the real annual change and the seasonally adjusted monthly change.
An official at Japan’s Ministry of Internal Affairs linked September’s spending decline to poor weather that kept people from going out, according to Reuters. In Tokyo, rain was recorded every day of the month for the first time on record, the same report said. This provides context for the severity of the monthly spending drop, but does not change the fact that the annual decline was 6.8%, the largest since September 2020. Among households with wage earners, average monthly income was 528,074 yen in September, up 3.4% in nominal terms and 0.9% in real terms year on year, according to the Statistics Bureau. Real wages also rose for a ninth consecutive month, while nominal wages grew at their fastest pace since January 1997, according to Reuters.
In Britain, the Bank of England raised its interest rate by a quarter of a percentage point to 4%, in a decision backed by the Monetary Policy Committee by 8 votes to 1, according to the minutes of the meeting that ended on November 4. The dissenting member voted for a larger, half-point increase to 4.25%. The bank said consumer price inflation was 3.5% in September and that it expects it to rise to about 5% by mid-2027 as energy prices increase. This places the rate decision against a backdrop of inflation expected to continue rising, alongside limited disagreement within the committee over the size of the increase. The bank said monetary policy "is not on a preset path" and that the committee would assess the evidence at each meeting, while monitoring wages, pricing and energy.
On the Japan side, a Reuters report said household spending would be among the factors the Bank of Japan scrutinizes when assessing the possibility of another rate increase. The report said many analysts expect the next increase to come in December, without making that timing a settled decision. The bank’s next monetary policy meeting is scheduled for December 17 and 18, 2026, according to its official calendar. The Bank of England is due to announce its next rate decision on December 17. Investors will assess the pair’s path in light of Japanese data and the banks’ upcoming decisions, with the divergence in monetary policy stances remaining a key driver of sterling against the yen.