• GBP/JPY may receive support as the BoE may leave its policy rates unchanged on Thursday.
• The Japanese Yen rises as Japan’s Labor Cash Earnings rose 1.9% in September, as expected.
• BoJ Meeting Minutes indicated that policymakers maintained a bias toward a tightening stance.

GBP/JPY depreciates after registering more than 0.5% gains in the previous session, trading around 200.90 during the European hours on Thursday. The downside of the GBP/JPY cross could be limited as the Pound Sterling (GBP) receives support ahead of the Bank of England’s (BoE) interest rate decision due later in the day.

Traders expect the United Kingdom (UK) central bank to keep its policy rate unchanged at 4% in November, but softer inflation and wage data have strengthened the case for rate cuts in the coming months.

Chancellor Rachel Reeves is expected to introduce stricter fiscal measures in her November 26 budget to tackle the UK’s substantial borrowing requirements. Reeves hinted, in a pre-budget address, at raising taxes and underscored the importance of managing debt and borrowing expenses.

The GBP/JPY cross loses ground as the Japanese Yen (JPY) gains ground following an improved Labor Cash Earnings data, which reinforced expectations that the Bank of Japan (BoJ) may deliver a rate hike. Nominal wages rose 1.9% in September, as expected, up from a 1.3% (revised from 1.5%) gain in August.

Minutes from the Bank of Japan’s (BoJ) September meeting, released on Wednesday, maintained expectations for a near-term interest rate hike. Several board members noted that the central bank could soon shift toward a tightening stance, as the 2% inflation target has been largely met.

BoJ Governor Kazuo Ueda stated that the 2026 wage outlook will be a key factor in determining the timing of resuming policy tightening. Meanwhile, Prime Minister Sanae Takaichi emphasized that Japan has not yet achieved sustainable inflation supported by robust wage growth, reflecting her administration’s cautious approach to further rate hikes.