The euro area consumer price index and US employment report are among the economic indicators likely to affect the USD/JPY market this week. Market volatility is expected to depend on the ECB's future interest-rate moves and the NFP result.
Among the indicators scheduled for release this week, the euro area Harmonised Index of Consumer Prices (HICP) is expected to come in at 3.9% year on year in October, a slight increase from the previous month, with the effects of persistently high energy prices expected to continue. The ECB is assessing the timing of its next move, whether a rate cut or a rate hike, at its latest policy meeting, and a further rate hike is considered likely in December.
In the October US employment report, nonfarm payrolls (NFP) are expected to increase by approximately 55,000 from the previous month, with a rebound expected following the pullback in September's growth. Together with an increase in job postings, a leading indicator from Indeed, this suggests that the labour market is expected to remain resilient.
If this NFP reading is in line with market expectations, it could approach the estimated break-even level needed to keep the unemployment rate in check, providing an opportunity to reaffirm the strength of the labour market. With energy prices remaining elevated, the outlook for the secondary effects of inflation and the market response will be key areas of focus.