Bitunix Analyst: Nonfarm Payrolls Far Exceed Expectations, September Rate Hike Prospects Reignite, US-Japan Policy Divergence Intensifies Bond Market Pressure

US August nonfarm payrolls rose by 162,000, far exceeding market expectations of about 56,000; June and July were revised upward by a combined 55,000. The unemployment rate held at 4.1%, with average hourly earnings up 0.3% month-over-month and 3.1% year-over-year. Job gains were mainly concentrated in food services and local government education, while the information sector lost 23,000 jobs, and healthcare hiring growth also fell below last year's average. Though the labor force participation rate rose to 61.6%, it has still declined by 0.5 percentage points since the start of the year. Analysts suggest that despite the strong headline nonfarm payrolls figure, it may not fully reflect a broad recovery in hiring demand, with CPI data likely determining whether the Federal Reserve can use this as justification for rate hikes.

Two other major variables loom in the market: Japan's overseas securities holdings decreased by $87.8 billion in August, approaching the corresponding yen intervention scale of approximately $98.6 billion, raising concerns that Japan may sell overseas assets, including US Treasuries, to support động yen, thereby increasing pressure on US Treasury supply. Meanwhile, record of Federal Reserve Board members Bowman and Warsh's engagements with banking industry around the FOMC blackout period surfaced, combined with Trump's calls for lower interest rates and US national debt reaching $40 trillion, putting Fed independence and policy credibility under scrutiny. Should CPI remain resilient, rate hike expectations could stoke the US dollar and Treasury yields, compressing high-valuation assets and cryptocurrency liquidity; should inflation cool, markets may be reset pricing for the duration of elevated rates.

[Odaily]