It’s tough to square the numbers in the non-farm payrolls report with the market reaction.
The jobs report was good, particularly the household survey as the unemployment rate fell back to 3.7% despite rising labor force participation.
Unemployment rate
The initial market reaction was exactly what you would expect with the US dollar surging across the board, up around 50 poips. Since then though, it’s all been erased and USD/JPY is now lower than it was before the report.
I think that last detail is a clue as there may have been some large USD/JPY positions looking for some liquidity to make an exit and that could be spilling over into broader USD weakness.
That said, it’s not just FX as equities have rebounded. It’s a messy one, which always seems to be the case after the jobs report.