Credit Agricole CIB Research on USD/JPY outlook on GPIF allocations scenarios.

"Japan’s GPIF recorded its first QoQ loss in 18M in Q2 largely due to losses on its domestic and foreign bond holdings. The pension fund has not announced any changes to its asset allocations for Q4, which is not a surprise to the market. Newswire reports suggested GPIF’s management committee did not discuss portfolio allocation at its 28 September board meeting, despite holding a meeting in August for the first time in seven years. So, the GPIF has equal allocations across all four assets classes of 25% with variations around these shares of up to +/-5-6ppt. The current allocation to domestic bonds is 26.49% vs 25.59% in June," CACIB notes.

"We examined several scenarios of the GPIF’s allocations and what they would mean for USD/JPY. We concluded that even if the pension fund did not formally change its allocations, allowing the share of JGBs in its portfolio to reach the upper limit of 31% would be enough to drive USD/JPY down to 150," CACIB adds.

CIBC Research reacts to the  US and Canada October job reports

"The US labour market bounced back to life in October. October nonfarm payrolls jumped to 165K, higher than the consensus expectation of 70K. September was also revised higher to 60K from 29K previously. The unemployment rate declined to 4.1% in October from 4.2% in September.

This report suggests that the labour market remains near full employment in the US, which should free up the Fed to continue to focus on the inflation fight. We continue to believe the Fed will deliver a 25 bps hike in their December meeting," CIBC notes.

"While the Canadian Labour Force Survey is notoriously volatile, three monthly declines in a row is a trend that is hard to ignore. The -5K change in employment was below the consensus forecast for a +15K gain, with sector breakdown showing a large decline (-29K) in wholesale and retail trade. T

 While there's one more LFS report due for release before the Bank's December meeting, the recent trend in the labour market suggests that slack is opening up again in the economy and supports a hold at that time," CIBC adds.

• EUR/USD rallied to 1.1234 overnight, sellers emerged, the pair turned lower

• US yield gains helped to drive broad-based USD buying

• Gold's drop & gain in oil and USD/CNH added weight on EUR/USD

• The pair fell below the 10- & 21-DMAs, hit a 4-session low of 1.1167

• NY opened near 1.1175, EUR/USD traded down -0.40% in early NY action

• Techs lean bearish; daily RSI is falling, monthly gravestone doji candle in place

• US Oct. jobs report, Nov. University of Michigan survey are data risks in NY
eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• 0.6942 traded overnight, sellers then emerged and a sharp fall ensued

• Broad-based USD buying, US yield gains weighed on AUD/USD

• Drops in gold, copper & UD/CNH's rally off its low added weight on the pair

• AUD/USD hit 0.6862, level last seen April 2; NY opened near 0.6875, down -0.80%

• Techs lean bearish; RSIs indicate downward momentum, pair below 10- & 21-DMAs

• Monthly chart shows bull pennant base breaks, Bolli bands contracting

• US Oct. payroll report, Nov. University of Michigan survey are risk in NY's morning
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

LONDON, Nov 6 (Reuters) - USD/JPY has so far been slow to follow other markets lower, but FX options are pricing more JPY strength, in line with a view at Citi that USD/JPY has further to fall.

Citi says many clients are asking why USD/JPY isn't falling further. Its Asia spot trader, Patrick Hu, doesn't have a clear answer. The bank still favours a stronger JPY from here, particularly against the New Zealand dollar going into the NZ election this weekend. It says the case is becoming clearer and more aligned.

Citi points to four factors. First, it sees limited topside for USD/JPY on technical grounds, with official warnings adding to that. Second, it expects the equity selloff to prompt more unwinds of FX hedges, which have supported the pair for most of this year. Third, it says the Bank of Japan is shifting gears: it has signalled it has met its price trend goal, and Citi reads its September minutes as pointing to a new phase focused on sustaining that trend, potentially with faster rate hikes.

The fourth was today's release of GPIF's second quarter fiscal year 2026 results. The fund posted a ¥5.25 trillion ($33.25 billion) loss on total assets of ¥319.8 trillion, but left its targets unchanged at roughly 25% for each of its four main asset classes. Citi hadn't expected a formal change, though it said a noticeable rise in the domestic share would have been enough to push USD/JPY lower. The government has discussed shifting GPIF's strategy toward domestic assets, but nothing has been decided.

The options market is leaning the same way. The premium for JPY calls over puts has risen. The benchmark 1-month 25 delta risk reversal moved to 2.1 from 1.8 in the last 24 hours. JPY calls give the holder the right to buy JPY, and puts give the right to sell it. A wider premium for calls means traders are paying up for protection against, or exposure to, a stronger JPY.

Implied volatility has also climbed. On Thursday, 1-month USD/JPY implied vol rose to 7.3 from 6.3, trading higher as spot fell in Asia. Rising vol alongside a higher JPY call over put premium on risk reversals, suggests the market is preparing for more downside rather than a quick rebound.

Together, the Citi arguments and the options pricing still point the same way, even though the GPIF catalyst didn't deliver, it maybe down to stock markets and broader risk aversion to decide whether USD/JPY breaks lower.($1 = 157.9000 yen)

USD/JPY FXO implied volatility


USD/JPY 25 delta risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• The equity rout prompted investors to seek shelter in safe-haven currencies, including the yen

• USD/JPY dropped to 157.27 in Asia, but has subsequently recovered to 158.33 in London, EBS data shows

• The daily cloud, that currently spans the 157.17-158.44 region, continues to underpin USD/JPY

• A break above the 159.03 September 24 peak would be a very bullish development

• EUR/JPY 30- and 60-day log correlations with USD/JPY are high, remains above +0.5

Daily Chart


Correlation Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• AUD/USD falls to 0.6862 as stock losses weigh on risk-sensitive AUD

• 0.6862 is lowest level since April 2 (0.6860 was low that day)

• Nikkei and Kospi both fell 6% today; Nasdaq fell 5.5% on Thursday

• AUD/USD was trading on 0.70 handle 24 hours ago (before AI rout)

• 0.6900 (former support point) is now a resistance level

• US jobs report due at 1330 GMT: Oct NFP f/c 65k; jobless rate f/c 4.2%

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Democrats' election win spooks AI investors, hammering stocks and boosting risk aversion

• That has lifted the price of FX volatility protection, with FX option implied vols moving higher across the board

• AUD/USD 1-month implied vol is the biggest gainer, at 7.65 from multi-year lows of 6.25 early Thursday

• USD/JPY 1-month vol reached 7.3 from 6.3 before supply returned

• Gains elsewhere are smaller: EUR/USD 1-month vol is 5.6 from 5.2, with similar rises in GBP/USD and USD/CHF

• Rising vols show growing demand for FX hedges, with risk-sensitive AUD/USD and USD/JPY leading the move
Benchmark 1-month expiry FXO implied volatility

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• FX option strikes expire at 10am New York/15:00 GMT on Friday November 6

• EUR/USD: 1.1150-60 (1.2BLN), 1.1195-1.1200 (716M), 1.1240-50 (1.3BLN), 1.1300 (702M)

• GBP/USD: 1.3315 (726M), 1.3400 (241M), 1.3475-85 (593M). EUR/NOK: 10.4600 (303M)

• AUD/USD: 0.6900 (792M), 0.6940-50 (910M), 0.6975-80 (311M)

• NZD/USD: 0.5640 (914M). AUD/NZD: 1.2395-1.2400 (478M), 1.2450 (622M)

• USD/CAD: 1.3950 (1BLN), 1.4000-05 (1.7BLN), 1.4050 (723M), 1.4100 (617M)

• USD/JPY: 157.00 (1.7BLN), 157.35 (862M), 157.50 (1.1BLN), 158.00 (4.2BLN), 158.50 (618M), 159.00 (1.6BLN)

• AUD/JPY: 110.00-05 (735M)(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY off to 157.27 EBS early before bouncing later to 158.00

• Bounce from ahead of base of 157.17-158.44 daily Ichimoku cloud

• Market still seen heavy from area of 200-DMA at 158.66, 100-DMA at 159.09

• Spot currently in area of 157.90 200-HMA, hourly cloud 158.06-11 above

• Massive $4.2 bln option expiries today helping to cap upside

• Large on 157 too, total $4.9 bln and helping to contain spot action

• EUR/JPY down to 176.49 EBS early before bouncing to 177.12

• Bounce from 200-HMA now at 176.51, still below 177.07 100-HMA

• Resistance too at still ascending hourly Ichi cloud between 177.42-92

• CHF/JPY 192.66 early to 193.39, in 191.54-194.20 daily Ichimoku cloud

• Holding below 193.35-80 hourly cloud, in area of 193.18 ascending 100-HMA

• GBP/JPY 211.54 early to 212.45, off since, back in 210.38-212.74 daily cloud

• Holding mostly between 211.43 and 212.43 200 and 100-HMAs now

• AUD/JPY from early 108.89 low to 109.53 before falling again to 108.90

• Key near-term support at 108.59 spike low October 15

• NZD/JPY 87.96 early to 88.31 before falling again to 87.85

• Lowest since 87.49 on November 26, 2025, 87.20 trough then on November 20

• Data showing continuing wage rises suggests BOJ likely to hike again in Dec

• Related , , on flows

• Nikkei plunges alongside Wall Street overnight, JGBs rally on haven flows

• On Japan data , Nikkei , JGBs
USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• GBP/USD on the defensive in Asia after closing 0.15% lower on Thursday

• Eye-catching selloff in tech stocks weighs on risk appetite, undermines GBP

• AI regulatory worries rattle Asian markets; Nikkei -5.3%, KOSPI -4.2%

• Hawkish BoE rate hike likely to cushion GBP decline; US jobs data eyed Fri

• Resistance 1.3500-05, 1.3525-30, support 1.3435-40, 1.3400-05

• Thursday range 1.3445-1.3501, Asia 1.34445-1.3463
BoE:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.1% Fri as investors reduce risk ahead of perilous end of week

• U.S. Oct non-farm payrolls due Fri, Reuters poll consensus +65k (prior +29k)

• Threat of deeper AI trade rout has risk sentiment in broad based retreat

• AUD ultimately targets 0.6865 support, break below would accelerate fall

• National Australia Bank's Irvine warns on growing risk of AU recession

• Hauser says public confidence in RBA's ability to counter inflation at risk

• Range Asia 0.6921-42 support 0.6865 0.6835, resistance 0.7140 0.7282
AUD Daily 21/55/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY volatile in Asia this morning, to 157.27 EBS early before bouncing

• High so far 158.00, good offering interest still eyed in area

• Massive $4.2 bln in option expiries today at 158.00 helping to cap spot

• Japanese exporter likely behind some of the offers, foreign players too

• Adding to JPY longs on the USD/JPY bounce?

• IMM CTA yen longs double to 101,591 contracts as of Oct 27

• Buying of USD/JPY maybe on Nikkei basing at 56,745.81 after early sales

• Some bargain hunting by foreign players? Fresh currency hedges put on?

• Nikkei has since bounced, around 57,628 now, still -5.6% on day

• Related , for more click on [FXBUZ]

USD/JPY hourly:


Nikkei 225 hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD +0.1% Fri, but still 1.2% below Thur 0.7024 high on soured sentiment

• Markets wary of broad risk-off contagion stemming from AI trade rout

• AUD ultimately targets 0.6865 support, break would open door for bigger move

• National Australia Bank's Irvine warns on growing risk of AU recession

• Hauser says public confidence in RBA's ability to counter inflation at risk

• U.S. Oct non-farm payrolls due Fri, Reuters poll consensus +65k (prior +29k)

• Range Asia 0.69245-42 support 0.6865 0.6835, resistance 0.7140 0.7282
AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Repercussions from Wall Street plunge, yen bid on presumed haven demand

• USD/JPY from 158.51 to 157.55 yesterday, Asia so far today 157.81 to 157.27

• Heading for 157.17-158.44 daily Ichimoku cloud base, 156.96 EBS low Oct 30?

• Resistance in place from flattening 200-HMA up at 157.89, then at 158.00

• Japanese exporters likely in sell-rally mode alongside foreign investors

• Nikkei likely down with Wall Street too, currency hedges to be taken off?

• Massive $4.2 bln in option expiries today at 158.00 strike, to help cap

• Plenty on 157 too - between 157.35-60 $2.1 bln, gravitational pull?

• Just below between 157.05-30 $744 mln, at 157.00 $1.7 bln, more on 156

• JGB-US Treasury rate differentials recently narrowing, continuation?

• Two-year rate differentials currently @269 bps, 10s @207 bps

• Related comments , , ,

• And , also , on Fed-speak

• US markets , , ,

• Japan news , for more click on [FXBUZ]

USD/JPY:


NASDAQ Index:


Nikkei 225:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD -1.1% from Thur 0.5658 high as sentiment sours post-U.S. election

• Nasdaq slides 4.3% as AI spending & regulatory concerns weigh heavily

• NZ's major parties (National & Labour) neck-and-neck in pre-election polls

• Futures pricing implies 60.2% chance of Dec RBNZ hike, down from 78.2% Tue

• NZD break below Oct 14 0.5566 low back on the radar as malaise resumes

• U.S. Oct non-farm payrolls due Fri, Reuters poll consensus +65k (prior +29k)

• Range NZ 0.55939-0.5613, support 0.5566 0.5485, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA


NZD Hourly Bollinger Study

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -1.1% from Thur 0.7024 high as U.S. equities tank, Nasdaq -4.5%

• AI spending & regulatory concerns spark broader fire sale, copper -1.3%

• Hauser warns public confidence in RBA's ability to counter inflation at risk

• AUD pushing lower hourly Bollinger band, may slow pace of downside extension

• Pair targeting 0.6865 support zone, break below opens gate for bigger move

• U.S. Oct non-farm payrolls due Fri, Reuters poll consensus +65k (prior +29k)

• Overnight range 0.6937-0.7024 support 0.6865 0.6835, resistance 0.7140
AUD 21/55/100-DMA


AUD Hourly Bollinger Study

(James Connell is a Reuters market analyst. The views expressed are his own.)

• GBP$ steady in NorAm afternoon, -0.02% at 1.3465; NorAm range 1.3486-1.3445

• Pair had tested resistance by 1.35 in early Europe trade before moving lower

• BoE expected 25bp hike had little effect on price, initial move lower faded

• Vote more hawkish than expected, Mann sought 50bp hike, Rtrs f/c was for 2 holds

• Going forward BoE yield advantage over Fed likely keeps GBP$ moving higher

• Risk (AI/tech) on backfoot stirs haven move into USTs, lower yields sap USD strength

• GBP$ supt 1.3445 post-BoE Thursday low, 1.3423 flat 200-DMA, 1.3341 daily cloud base

• Res 1.3503 Wednesday high, 1.3566 daily high Sept 9, 1.3675 daily high Aug 21

GBP Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

Danske Research changes its BoE rate call.

"The BoE raised Bank Rate by 25bp to 4.00%. Vote split 8-1, with Mann preferring a 50bp hike—meaning all members supported tightening. Inflation is expected to reach around 5% by mid-2027. Despite limited evidence of second-round effects, the BoE sees enough price pressure to act,:" Danske notes.

"We change our call and add two further 25bp hikes in February and April, taking Bank Rate to 4.50%, unless a lasting resolution to the conflict is reached," Danske adds.

• NY opened near 0.7015 after AUD/UD rallied to 0.7024 overnight

• The pair fell early as investors sought safe assets due to risk-off sentiment

• Stocks, AUD/JPY fell while US Treasury securities rallied; reinforced bid for safety

• AUD/USD hit a 13-session low of 0.6945, neared 0.6955 late, was down -0.76%

• Falling RSIs, pair's hold below 10- & 21-DMAs are bearish tech signals

• US October payroll report is a key risk in NY for Friday
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research previews the NZ elections on Nov-7.

"New Zealand’s 7 November election appears too close to call. Our Monte Carlo simulations of recent polling lean slightly towards a Labour-led outcome, while prediction markets slightly favour a continuation of the current National-led government. Polling and prediction markets suggest neither major party will achieve a standalone majority, so coalition and confidence-and-supply negotiations will be decisive. As a result, minor parties will likely have greater influence over the policy mix of any future government," GS notes.

"In the very near term, our base case is that NZ’s political backdrop is neutral for the RBNZ. With the vote so close, government formation could take several weeks, and a new government is unlikely to be formed until after the RBNZ’s 9 December meeting," GS adds.

• Ether rallied to 2442.64 overnight, sellers emerged and it then turned lower

• It fell despite sharp gains in US dollar alternatives gold and silver

• Broad-based USD buying, firm US yields weighed on Ether

• Ether fell back below the 38.2% Fibo of the 2178.34-2805.45 rally

• That is the second time in as many days Ether failed to hold above that Fibo

• A daily inverted hammer formed and daily RSI turned downward

• Ether may need to consolidate recent gains if rally off Oct. 30 low is to resume
eth

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research previews the US October jobs report due on Friday.

"This month, we look for headline NFP to rise by +65k, offering a middle ground in firming from +29k in September but still coming in below +133k in August. On balance, we see this as a solid pace in the current environment in which the breakeven has dropped sharply due to shifts in immigration policy, especially as the three-month moving average would bump up to +76k from +51k if our forecast is on track, pending revisions," CACIB notes.

"With decent job gains expected on the month, we project an unchanged unemployment rate of 4.2%, slightly up from the July/August trough but still a historically low level. We expect average hourly earnings to rise 0.3% MoM, firming from just 0.1% MoM in September, though base effects would still take the YoY pace down to 2.9% from 3.0%," CACIB adds.

Citi on the scope of JPY intervention after the US midterm elections.

"We expect a clear downtrend in the USDJPY to emerge over the long term now that US midterm elections are over, but the risk of JPY weakness will continue to smolder in the short to medium term. In the near term, the key will be the performance of US equities after the elections and the impact on geopolitical risk and crude prices via the situation in Iran,"Citi notes.

"Crude prices are also an important factor in the economic policy outlined by Treasury Secretary Scott Bessent, and we do not expect any change in Japanese authorities' ongoing efforts to defend the JPY. We expect the next round of intervention to buy the JPY if the USDJPY tests ¥160/$, with the authorities likely to try to push the pair below ¥155/$," Citi adds.