US Jobs Report to Bring Clarity After Fed Confusion

The US non-farm payroll (NFP) report on Friday will be closely watched after last week's Federal Reserve meeting left investors confused. The Fed's decision to maintain a hawkish tone but provide little detail on its inflation-targeting plan has sparked rate hike expectations. However, the market is now pricing in only 65% chance of a September rate hike, down from nearly full certainty prior to the meeting.

The August NFP report is expected to show 91,000 jobs created in July, up from 57,000 in June. A solid reading could support the Fed's ability to raise rates, while a weaker-than-expected result would raise questions over the strength of the labor market and potentially pull yields lower.

The US dollar (USD) has fallen against the Japanese yen (JPY), which was intervened by both countries last week to stop its slide. The coordinated action is seen as a rare event, with a successful history since 1998 in moving markets.