Today's mixed U.S. jobs data nL1N21N0FC disappointed dollar bulls hoping for higher rates to support their cause, but falling yields provided a consolation by boosting risk sentiment -- along with this year's global reflation trade and the USD/JPY uptrend.
The 180k three-month average payrolls growth rate is similar to last year's rate, which is impressive given the government shutdown, slowing global growth, Brexit and prolonged U.S-China trade talks.
The 6k drop in manufacturing jobs versus 170k rise in the far less trade sensitive services sector suggests international economic risks remain a drag on an otherwise reasonably robust economy nearing its 10th, and historically longest, year of expansion.
The pullback in wage growth and lingering international risks will keep the Fed on hold and U.S. rates tame, a key ingredient in this year's yen-funded risk-on trends.
Today's 10-year Treasury yield high by 2.54 percent ran into the January flash-crash major low, adding to the post-payrolls pullback in Treasury-JGB yield spreads, but yen selling tied to fresh 2019 highs in stocks is outweighing the drag from yield spreads.
USD/JPY still has to deal with large 112 expiries through next week and 2019's 112.13 high.
Good news on trade talks and Brexit would be potential breakout catalysts.
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