Japan's October core CPI to remain slightly negative

Japan's Governor Haruhiko Kuroda said in a recent meeting that the share of CPI items are increasing with a positive year on year growth, and this indicates a positive growth. Out of the important aspects that BOJ seeks, tightening of labour markets is a critical one.

Fluctuations in risk and USD strength and the way it is trending will be important agents to push USD/JPY, along with the Japanese data coming this week.

The core CPI might remian moderately negaitve for third straight month and October Nationwide CPI will be closely watched. BOJ stays confident that ex-energy core CPI stays on upward trajectory.

In this regard, October labour market survey will shed some light on the latest developments. 

"We expect continued tightness in the labour markets with unemployment steady at 3.4% and job offers/applicants ratio edging up slightly. Elsewhere, we will get October household survey (Friday) that is important to track the Q4 consumption momentum", says Barclays in a research note.