US August jobs figures showed 162,000 new positions, surpassing expectations and prompting upward revisions, according to ING. This stronger employment data has increased the likelihood of a Federal Reserve interest rate hike in September.
Despite this, Commerzbank notes that the Federal Reserve may still opt to keep rates unchanged but faces a significant risk of implementing another 25 basis points increase. Market watchers are thus weighing the possibility of either a pause or a modest hike at the upcoming meeting.
For Japanese investors, these developments in US monetary policy could influence the US Dollar’s strength and impact cross-border capital flows, affecting FX and equity markets in Japan.