• The Pound appreciates against a weaker yen, but is struggling to break above 201.40.
• Softer than expected Japanese household spending is weighing on the Yen.
• Thursday's "dovish hold" by the BoE is acting as a headwind for the Pound.

The Pound is gaining momentum on Friday, benefiting from Yen weakness following soft Japanese household spending data. The pair bounced from lows around 200.70 earlier in the day, but is struggling to break above the previous two days’ highs, in the area of 201.40.

Japanese data released during Friday’s early Asian session revealed that September’s Overall Household Spending growth slowed down to a 1.8% year-on-year pace from a 2.3% growth in August, missing expectations of a 2.5% reading.

These figures back Prime Minister Takaichi’s comments earlier this week, affirming that the Japanese economy is only halfway through the path to achieve sustainable and stable price growth, and cast some doubts about the Bank of Japan’s plans to hike interest rates at their December meeting.

The Sterling traded back and forth on Thursday, the Bank of England (BoE) left interest rates unchanged in a close-cut vote, with four committee members calling for a rate cut. The monetary policy statement revealed that the bank is confident that inflation has peaked, and Governor Bailey hinted at further monetary easing, boosting hopes of a December rate cut.