GBP/JPY Advances as Yen Weakness Outweighs Strong Japanese Spending Data

Key Moments

GBP/JPY Supported by Broad Yen Weakness

GBP/JPY moved higher to around 211.30 during late Asian trading on Friday. The pair benefited from persistent weakness in the Japanese Yen (JPY) against other major currencies. Despite stronger-than-expected domestic spending data, the Yen’s underperformance helped lift the cross.

JPY Performance Against Major Currencies

Today, the JPY showed its largest weakness versus the Euro. The table below summarizes percentage changes in the Yen against selected peers:

The heat map included in this report illustrates percentage moves among major currencies. Selecting the JPY as the base and reading across the row shows how it performed versus each quote currency, such as USD.

China-Japan Trade Tensions Pressure the Yen

Market sentiment toward the Yen has been under pressure from geopolitical developments. Earlier this week, China banned exports of dual-use goods—items with both civilian and military applications—to Japan. The move responded to Prime Minister Sanae Takaichi’s warning regarding Taiwan, as reported by ABC News.

Bank of Japan (BoJ) officials noted that some firms might face challenges due to China’s restrictions. However, they emphasized that the wider regional economy is unlikely to suffer major disruption.

Japan’s Household Spending Surprises

Domestic data showed resilience despite external headwinds. November Overall Household Spending rose 2.9% YoY, well above the market expectation of a 0.9% decline. This followed October’s 3% contraction, highlighting a strong rebound in consumer activity.

UK Data in Focus for Sterling Traders

GBP traded broadly steady as investors positioned ahead of UK labor market data. The employment report for the three months ending November is scheduled for release on Tuesday. Traders are likely to focus on the figures for insight into the Bank of England’s interest rate decisions.

Economic Indicator Details: Japan Overall Household Spending (YoY)

The Overall Household Spending metric, published by Japan’s Ministry of Internal Affairs and Communications, tracks total household expenditures. Higher readings typically support the Yen, while weaker figures weigh on it.

Overall, the upside surprise in household spending, combined with ongoing external pressures, kept the Yen soft. This left GBP/JPY supported near the 211.30 level, as investors balanced domestic resilience against geopolitical and trade risks.