US nonfarm payrolls rose by 255k jobs after an upwardly revised 292k surge in June, with hiring broadly based across the sectors of the economy, the Labor Department said on Friday. In addition, 18k more jobs were created in May and June than previously reported.
The unemployment rate was unchanged at 4.9% as more people entered the labor market.
Highlighting job market strength, average hourly increased a healthy eight cents and are up 2.6% yoy, while workers put in more hours.
policymaker Jerome Powell told the Financial Times the US economy is at increasing risk of becoming trapped in a prolonged phase of slow growth that points to the need for lower interest rates than previously expected. The newspaper was issued on Monday, but Powell spoke on Thursday, the day before strong US nonfarm payrolls numbers for July.
After Friday's data, Fed contracts were pricing in about a 46% chance of a rate hike by the end of this year, up from about 34%. In our opinion the Fed will raise rates in December.
Stark divisions in the views of Bank of Japan board members were highlighted on Monday, with some defending unlimited easing of and others arguing the BOJ had done enough.
The BOJ expanded stimulus at the July 28-29 meeting by doubling purchases of exchange-traded funds ( ), yielding to pressure from the government and market for bolder action , but the move fell short of market expectations. The BOJ said it will assess at its September meeting the effects of its negative interest rates on some bank deposits and its massive asset-buying programme - suggesting an overhaul of its stimulus programme may be in the works.
Board members Takehiro Sato and Takahide Kiuchi dissented to the decision to expand purchases, arguing that it would distort market functions and expose the bank's to excessive risk.
"The Bank should reject the idea that monetary easing has its limit and side effects. A limit to its purchase of Japanese government bonds (JGBs), if any, would be the total amount outstanding of JGBs issued," one member told the July meeting, a summary of opinions showed on Monday. Another member, likely either Sato or Kiuchi said: "An increase in purchases would make it clear that monetary easing is approaching its limit. Moreover, this action can be regarded as an incremental approach to monetary easing, and could trigger endless expectations for further easing.”
The USD/JPY rose strongly after Friday’s US non-farm payrolls. We think this rise may be continued in the coming days, given divisions among BoJ board members. We got long today at 102.35 with the target of 104.50.
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