Trading Day-Yen jumps, oil pumps

* Japan, euro zone, UK, US services PMIs (August) * Euro zone producer prices (July) * US services ISM (August) * US weekly jobless claims * US Federal Reserve officials scheduled to speak include Governor Christopher Waller, Cleveland Fed President Beth Hammack, Chicago Fed President Austan Goolsbee Fiscal concerns, crowding out from AI issuance, rising risk premia, and a good old-fashioned investment boom are some of the factors said to be driving bond yields higher. There may be some merit in all of them. But the resurgent oil price is emerging as one of the most significant. Benchmark crude is up 25% in less than a month, and is now up more than 40% on a year-on-year basis. The correlation between oil and the 10-year Treasury yield is strengthening significantly too. At what point do high energy prices start to choke consumer spending? U.S. labor market data so far this week, ahead of the key non-farm payrolls report on Friday, suggests hiring remains extremely subdued. While the latest 'JOLTS' report on Tuesday showed job openings rose by 89,000 in July, hiring fell by 278,000. The latest ADP report on Wednesday showed that private sector payrolls rose by only 38,000 in August, less than expected. Something for the dwindling band of policy doves to cling onto? Perhaps, but it would take an almighty downside surprise on Friday to put rate cuts back on the table. The Fed's center ground is shifting towards higher rates. President Donald Trump won't like it, but if a rate hike or two cools inflation, flattens the curve, and brings down longer-dated borrowing costs like mortgage rates, he may come around. The Japanese yen leaped against the dollar on Wednesday, its biggest rise since joint U.S.-Japanese intervention a month ago, while U.S. Treasuries shrugged off the wider bond market selloff that pushed Japanese and European yields to fresh historical highs earlier in the day, and Wall Street closed higher. The yen's jump on Wednesday followed strong hints from Japanese policymakers this week that interest rates will rise later this month. U.S. Treasury Secretary Scott Bessent also appeared to endorse tighter policy in Tokyo. The yen's rise of around 1% was its strongest since joint U.S.-Japanese intervention a month ago — indeed, analysts said central bank activity may have been behind the move, although probably a "rate check" rather than direct yen buying. This opens a wider debate, around the growing U.S. influence over Japanese policy. The U.S. was involved in the yen-buying operation with Japan a month ago, and it seems clear that the Treasury is uncomfortable with the dollar above 160.00 yen, and also wants to avoid a scenario where Japanese intervention involves the sale of U.S. bonds. Is Japanese policy being set in Tokyo or Washington?

Trading Day-Yen jumps, oil pumps

What could move markets tomorrow

Oil's rise adds to bond market pressure

U.S. labor data point to subdued hiring

Yen jumps after hints of tighter Japanese policy

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