A roughly 2.5 percentage-point gap between British and Japanese policy rates framed the pound’s modest gain against the yen Monday, ahead of a UK Budget and a Bank of Japan decision this week.
FXStreet put the pound at around ¥210.18, up 0.19% on the day, in an article timestamped 8:22 a.m. ET (12:22 UTC).
The Bank of England held its Bank Rate at 3.75% in September. The Bank of Japan’s latest guideline calls for an uncollateralized overnight call rate of around 1.25%. Comparing the two rates gives a gap of about 2.5 percentage points; neither central bank has announced a decision at its upcoming meeting.
UK Chancellor John Healey is scheduled to deliver the Budget to Parliament on Oct. 28. The government plans to publish the announcements and supporting documents that day. Healey said in July that the Budget would meet the government’s fiscal rules.
The Bank of Japan will meet Oct. 29-30 and is scheduled to release its decision Oct. 30. Japan’s Statistics Bureau reported that September consumer prices rose 2.1% from a year earlier excluding fresh food and 2.4% excluding fresh food and energy. The bank’s 2% inflation target applies to the overall consumer price index.
After its September meeting, the Bank of Japan said it would continue raising its policy rate in response to economic, price and financial conditions while weighing the timing and pace. It set no date for another increase. The bank moved away from negative interest rates and its yield-curve control framework in March 2024.
After this week’s Budget and Japanese policy meeting, the Bank of England’s next rate decision is scheduled for Nov. 5.
