The US non-farm payrolls data fell short of expectations, and the yen expanded its gains, easing speculations that the Japanese authorities might once again enter the market to support the yen. The yen rose more than 1% against the US dollar to 152. It has already accumulated 4% this week, and is expected to record the biggest weekly gain since November 2022. In order to contain further declines, Japan's Ministry of Finance may have bought yen twice this week, costing a total of about 9 trillion yen (59 billion US dollars). The yen was still down 11% over the past year, making it the worst performing G-10 currency.

Priya Misra, portfolio manager at J.P. Morgan Asset Management, said the employment data “underscores Powell's confidence that monetary policy is restrictive and that labor supply is the main driver of strong growth in non-farm payrolls in recent months.” The slowdown in employment and wage growth means a “soft landing,” she believes, “Assuming that the CPI also shows a slowdown, the August rate cut may return to the market narrative.” Looking at it now, the market expects the Federal Reserve to cut interest rates by 10 basis points at the August meeting, which is higher than the 7 basis points before the report. Therefore, it is clear that more data is needed to show the economic slowdown, especially the upcoming inflation data.

Analyst Joseph Richter said that wage data is probably the most noteworthy data point in this non-farm payroll report. In the past three months, the average hourly wage growth rate was only 0.23%, compared to 0.4% in the previous three months. Slowing wage growth may be the driving force behind the improvement in non-housing service inflation data in the next few quarters.

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The three major US stock indices rose in the short term, NASDAQ futures rose more than 1.5%, and Dow futures and S&P 500 futures rose more than 1%. After the release of the non-agricultural data, traders brought forward the Federal Reserve's first interest rate cut from November to September. The swap market once again predicts that the Federal Reserve will cut interest rates by 25 basis points twice during the year, and it was expected to be once before the April non-farm payrolls data was released.

US Treasury yields fell short of expectations and the dollar weakened as the April non-farm payrolls report fell short of expectations. The net addition of 175,000 new jobs in the US in April was lower than 315,000 after an upward revision in March, and also lower than market expectations. The unemployment rate rose slightly from 3.8% to 3.9%. Weaker-than-expected data may reinforce expectations that the Federal Reserve will cut interest rates soon. US Treasury yields began falling even before the data was released, and the decline deepened further after the data was released. Currently, the 10-year US Treasury yield is 4.469%, and the 2-year Treasury yield is 4.743%.

The far lower expectations for non-agricultural agriculture combined with two interventions by the Japanese government during the week. USD/JPY has fallen 4% against the Japanese yen this week, the biggest weekly decline since November 2022.

According to CME “Federal Reserve Watch”, the probability that the Fed will keep interest rates unchanged in June is 91.1%, and the probability of cutting interest rates by 25 basis points is 8.9%. The probability that the Federal Reserve will keep interest rates unchanged until August is 70.4%. The probability of cutting interest rates by 25 basis points is 27.6%, and the probability of cutting interest rates by 50 basis points is 2.0%.

After the US non-agricultural report was released, the US dollar index fell by about 60 points in the short term; the US dollar fell 100 points against the yen in the short term, and is now 152.20. US Treasury yields have declined in the short term, and US bond yields for most matures have declined by at least 10 basis points during the day. US stock futures rallied in the short term, and Dow futures increased to 1.4%. Spot gold rose by about 7 US dollars in the short term and fell rapidly. Currently, it is reported at 2296.9 US dollars/ounce.

Analyst Chris Anstey said wage growth in the non-farm payroll report was also lower than expected, which is probably the biggest problem. It should also be noted that revisions to the previous two months resulted in a cumulative reduction of 22,000 people in employment. This is an overall weak report.