Today’s Market Outlook November 6, 2026 Dollar buying and yen buying compete amid a global stock sell-off; markets loo

November 6, 2026

Dollar buying and yen buying compete amid a global stock sell-off; markets look to US jobs data for direction

Market overview

Today’s currency market is seeing both safe-haven demand for the US dollar and yen buying as investors respond to a global stock sell-off.

USD/JPY fell to 157.26 early in the Tokyo session before rebounding above 158.00. It later pulled back to around 157.70 in London, then climbed to a new high of 158.20.

EUR/USD briefly fell to 1.1168, while GBP/USD dropped to 1.3389. Cross-yen pairs were also weak, with EUR/JPY reaching 176.16 and GBP/JPY falling to 211.31.

The US Dollar Index briefly rose to 102.026. The market has shifted from the dollar selling seen through yesterday to renewed dollar buying in response to falling equities.

The main event tonight is the US employment report at 10:30 p.m. The data, along with the reactions in US yields and equities, could quickly shift the direction of USD/JPY.

Global stock sell-off and risk aversion

Uncertainty in equity markets is the main force driving currencies today.

The Nikkei 225 fell more than 4,300 points at one stage and closed down 3,643 points. In South Korea, a sharp drop in share prices triggered a circuit breaker, reflecting a broader pullback from risk across Asia.

Markets have yet to settle on how to assess policy after the US midterm elections or the outlook for AI-related investment, and reactions differ across markets.

In currencies, demand for the dollar’s safety and liquidity is competing with yen buying as investors reduce short-yen positions. A rise in USD/JPY therefore does not, by itself, mean that risk appetite has returned.

The weakness in both EUR and GBP against the dollar and the yen also points to a strong risk-averse tone.

US employment report

The October US employment report is due at 10:30 p.m. Japan time.

Key market forecasts are:

• Nonfarm payrolls: an increase of around 65,000–70,000

• Unemployment rate: 4.2%

• Average hourly earnings: +0.3% month over month

• Average hourly earnings: +2.9% year over year

The previous report showed an increase of 29,000 jobs, far below the market forecast at the time. Payroll growth is expected to recover this month, though the forecast still does not point to strong employment expansion.

If payrolls beat expectations and unemployment falls, the resilience of the US labor market may be reassessed, potentially supporting the dollar.

Conversely, weak payrolls alongside a higher unemployment rate could raise concerns about the US economy, encouraging lower US yields and further dollar selling.

Revisions to previous payroll figures will also matter. Even if this month’s figure is strong, substantial downward revisions to earlier data could prevent the initial dollar buying from lasting.

Average hourly earnings and the market reaction

Month-over-month average hourly earnings are expected to accelerate from the previous +0.1%, while the year-over-year rate is forecast to slow from +3.0%.

Because the monthly and annual figures point in different directions, it will be important to consider both rather than relying on just one.

If payrolls and wages are both strong, expectations for further rate hikes may be supported, lifting US yields and the dollar. However, if concern about high interest rates weighs on equities, yen buying could also strengthen and limit gains in USD/JPY.

If employment is weak and wage growth slows, lower US yields are more likely to weigh on the dollar. If the stock sell-off also accelerates, yen buying could add to the pressure and deepen a decline in USD/JPY.

Along with the immediate reaction after the release, watch whether the moves in US yields and equities persist once the initial volatility settles.

USD/JPY

USD/JPY rebounded above 158.00 after falling to 157.26, indicating that demand remains below the market.

The immediate focus is whether the pair can hold above the 10-day moving average near 157.93 and the 21-day moving average near 157.97.

On the upside, the Ichimoku cloud top near 158.44, the 200-day moving average near 158.66, and the November 3 high of 158.77 are key levels to watch.

A clear break above 158.77 would put 159.04 in view. However, intervention concerns tend to grow if the yen weakens rapidly, so the durability of any advance should be assessed carefully.

On the downside, the Ichimoku base line near 157.52 and today’s low at 157.26 are important. A break below today’s low could bring 157.00 into focus.

Dollar buying currently outweighs yen buying, but watch whether that balance reverses after the US employment report.

The US Dollar Index and European currencies

The US Dollar Index rose to 102.026, moving above its 10-day moving average at 101.914 and 21-day moving average at 101.971.

Dollar buying has strengthened in the short term. However, the broader pattern of lower highs since mid-October has not been fully reversed. It is too early to treat today’s rebound alone as the start of a renewed medium-term dollar uptrend.

EUR/USD fell below 1.1200 and briefly reached 1.1168. The focus now is whether it can recover 1.1200 or whether selling on rebounds pushes it lower again.

GBP/USD also fell to 1.3389. The rise in GBP/JPY to the 213.50s after yesterday’s Bank of England meeting did not continue; today both broad dollar buying and yen buying have weighed on the pound.

At 9:15 p.m., Bank of England Chief Economist Huw Pill is scheduled to speak about monetary policy. Along with yesterday’s policy decision, his comments on the prospect of further action could influence the pound.

Oil and the Middle East

Oil is recovering as buyers return after the previous session’s sharp decline.

President Trump said he was considering several options regarding Iran, including resuming airstrikes, continuing economic sanctions, or reaching an agreement, and indicated that a decision would be made soon. Markets are weighing the possibility of a diplomatic resolution against the risk of renewed military escalation.

A rebound in oil could support inflation concerns and safe-haven demand for the dollar. At the same time, it could add to concerns about higher costs and persistently elevated interest rates in equity markets.

In that environment, both the dollar and yen could attract buying, putting additional pressure on cross-yen pairs. Watch for Middle East headlines as well as the US employment report.

Japanese wages and Governor Ueda’s speech

Japan’s September real wages rose 2.2% year over year, above the forecast of +1.3% and the previous +1.6%.

The result points to an improvement in household purchasing power and provides a data point on the wage-price cycle. It could support expectations for further Bank of Japan rate hikes. However, global equity weakness and dollar buying are also significant today, so this figure alone is unlikely to sustain yen appreciation.

Bank of Japan Governor Ueda is scheduled to speak at the IMF at 1:00 a.m. Japan time on November 7.

As this comes after the US employment report, remarks on wages, prices, or monetary policy could trigger another market move.

Options market signals

The one-week implied volatility for USD/JPY is 7.78%, up from the low 6% range yesterday. It is now above the one-month measure, indicating increased concern about near-term volatility.

Risk reversals, which reflect demand for hedging against yen appreciation, have also shifted further in favor of yen calls. The market is showing signs of preparing for a sharp move toward a stronger yen in response to falling equities or the US employment report.

However, increased hedging demand does not guarantee that the yen will appreciate. The market is balancing the current resilience of USD/JPY with protection against downside risk.

Key points for overseas markets

• The US employment report at 10:30 p.m. and revisions to previous data

• Whether average hourly earnings move in the same direction as payrolls

• Whether continued weakness in US equities revives yen buying

• Whether USD/JPY can hold above the 157.90 area

• Whether the 158.44–158.77 resistance zone can be cleared

• Whether EUR/USD can recover 1.1200

• Whether Middle East developments and an oil rebound support dollar demand

• The University of Michigan Consumer Sentiment Index at midnight

• Governor Ueda’s speech at 1:00 a.m. and subsequent remarks from Fed officials

Scenario outlook

The base case is for a sharp move in either direction after the US employment report, as dollar and yen buying compete.

If employment and wages are strong and US yields rise, USD/JPY could test the mid-158s and 158.77. However, an accelerating stock sell-off could strengthen yen buying and cap the pair’s advance.

Conversely, weak employment data combined with lower US yields and falling equities could strengthen both dollar selling and yen buying, bringing 157.52 and 157.26 into view.

Weekend position adjustments may add to the volatility, so the initial reaction may not last. Watch US yields and equities after the release, and continue to track the market through Governor Ueda’s speech.