NFP in focus as Japanese Yen pares gains amid risk-off trading

158.30 area reached as USD/JPY rebounds from lows of 157.26.
Risk aversion and expectations of robust US NFP data later in the day are supporting the US Dollar.
Further Yen recovery remains possible, according to OCBC experts, as AI shares sell off and Japanese investors rebalance portfolios.

USD/JPY is trading around 158.30. Having rebounded from lows of 157.26, the pair is heading for a second straight weekly advance, though it remains within the past four weeks' trading range. The Japanese Yen (JPY) has surrendered its earlier gains as risk aversion fuels safe-haven demand for the US Dollar (USD). Investors are also preparing for a strong US Nonfarm Payrolls (NFP) release later on Friday.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Friday's technology-led equity sell-off has driven traders towards safe assets, including US Government Bonds and the US dollar. The retreat reflects concerns that the Democratic sweep in the US midterms will bring stricter AI industry regulation and the cancellation of plans for additional data centres.

65K US payrolls gain expected as markets await NFP

A robust US NFP reading could also reinforce the case for another Federal Reserve rate increase in December. Consensus points to net employment growth of 65K in October, compared with 29K in September. However, encouraging Jobless Claims and ADP Employment Change data earlier this week have raised hopes that the report will exceed expectations.

The broader policy outlook nevertheless continues to underpin the Yen. Markets expect the Bank of Japan (BoJ) to maintain its tightening path, with a December rate increase still firmly in contention. Minutes from the BoJ's September meeting reinforced those expectations: policymakers highlighted the need for further interest rate increases, and some advocated a steeper tightening cycle.

On the outlook, OCBC strategists highlight that “more frequent US-centric AI volatility in 2027 could strengthen its (JPY) hedge appeal.” They identify another possible driver, saying “the other potential JPY catalyst is Japanese portfolio rebalancing,” while markets will monitor “GPIF’s July-September results for signs of a shift towards domestic assets.” In a note, OCBC experts say that if “GPIF and other Japanese investors bring more money home or increase FX hedging on overseas assets, an important source of structural JPY selling could fade,”

Economic Data Release

Nonfarm Payrolls

Published by the US Bureau of Labor Statistics (BLS), Nonfarm Payrolls measures the number of jobs created across US non-agricultural businesses in the previous month. Monthly payroll changes can fluctuate sharply, and substantial revisions to the figures can generate further Forex market volatility. A strong reading is generally considered positive for the US Dollar (USD), whereas a weak figure is usually viewed as negative. However, revisions to earlier months and the Unemployment Rate carry as much weight as the headline number. The market response therefore hinges on investors' assessment of the BLS report in its entirety.

Read further.

Next scheduled release: Fri 6 Nov 2026 13:30

Release frequency: Monthly

Market consensus: 65K

Prior reading: 29K

Data source: US Bureau of Labor Statistics

US Jobs Report: Why Traders Watch

The first Friday after the reporting month brings America’s monthly jobs report. Forex traders regard it as the most important economic indicator. Policymakers track the change in employment closely because it is strongly correlated with the economy’s overall performance. With full employment among its mandates, the Federal Reserve factors labour market developments into policy decisions, which in turn affect currencies. Several leading indicators help shape forecasts, but Nonfarm Payrolls frequently deliver surprises and generate substantial market volatility. A reading above the consensus forecast generally supports the USD.

Economic Data in Focus

Unemployment Rate: The Labour Market Gauge

A lower Unemployment Rate is generally considered positive for the US Dollar (USD). A rise, by contrast, is usually viewed as negative. Published by the US Bureau of Labor Statistics (BLS), the rate measures the proportion of the total civilian labour force without paid work but actively looking for employment. Economies in recession typically record higher rates than those experiencing growth. On its own, however, this figure usually cannot establish the direction of the next market move. That also depends on the headline Nonfarm Payroll reading and the other figures in the BLS report.

Find out more.

Upcoming release: Fri 06 Nov 2026 13:30

Release frequency: Every month

Market consensus: 4.2%

Prior reading: 4.2%

Data source: