Dollar sitting on a trapdoor ahead of BoJ and NFP

Markets are riding a razor’s edge this week, with tariff distortion bleeding into macro prints and the dollar losing altitude fast. The greenback’s early-week wobble wasn’t just noise—it’s the market sniffing out that the next real catalyst could be a full-blown data-driven unwind.

The Bank of Japan may be grabbing headlines into Thursday, but let’s not kid ourselves—Friday’s U.S. jobs report is the real macro landmine this week. The yen story is alive and twitching, but it’s the NFP print that could blow the bottom out of the dollar and send G10 FX volatility screaming higher into the weekend.

Let’s start in Tokyo. The BoJ is poised to hold at 0.5%, and while there’s been no shortage of hawkish whispers in the lead-up, I’m not expecting fireworks. Ueda has a credibility game to play: he’ll need to show they’re still aiming for normalization while buying time in a world that’s rapidly losing visibility. Tariff shockwaves, softening export demand, and global policy drift have muddied the waters. I expect a soft downgrade to growth and a deferral on the 2% inflation timeline, but not enough dovish juice to crash JPY. If anything, Ueda keeps the yen in a tight leash by playing the hawkish forward guidance card—telegraphing hikes while quietly pushing them out.

But that’s the warm-up act. Friday’s NFP is the trapdoor.

The April jobs report lands just after the “Liberation Day” tariffs were announced—and that’s the key. The entire survey window took place in a storm of uncertainty. Business confidence plummeted, port congestion surged, and forward orders stalled. Consensus is still limping along at +130k, but let’s be honest: that number’s hanging by a thread.

A print below 100k wouldn’t just be a disappointment—it would be confirmation that tariffs are already bleeding into the labor market. If we get a sub-100k headline—or worse, a negative print—you can kiss the dollar goodbye. The repricing would be vicious: terminal rate expectations drop toward 2.75%, Fed cut odds accelerate, and the DXY cracks lower.

EUR/USD would rip through 1.1400, eyeing 1.1500 with fresh CTA fuel. USD/JPY gets taken to the woodshed on repatriation flows, especially if Ueda strikes even a mildly cautious tone the day before. The dollar smile turns into a full-blown grimace as rate differentials compress and safe-haven flows swing back to the yen.

This isn’t about soft data anymore—this is live fire. Consumer confidence has already cratered, inflation swaps are breaking higher, and Shein and Temu are passing on triple-digit price hikes in real-time. The hard data catch-down is in play, and NFP is the macro pressure valve.

Position-wise, I’m still looking to short the dollar on any upside pop, especially into NFP. EURUSD is stretched but still has legs to run. USDJPY( which is my main play this week) is vulnerable on both macro and policy fronts. And if Boj or NFP land even remotely outside of expectations, FX volatility gets a new lease of life.

Bottom line: we’re staring at a possible inflection point. A soft NFP won't just hit the dollar—it could detonate it. And with BoJ messaging in the mix, yen crosses will be where the real action lives. Tactical traders should already be adjusting. The trapdoor’s wide open. Just waiting for the trigger

Trump's 100-day meridian

Lock and load, because Trump’s second-act “100 days” sprint has the market gritting its teeth and grinning all at once. He kicked off with a classic soundbite—“a revolution of common sense”—and then blitzed the Fed’s playbook with executive orders faster than you can say “bullet train.” Judges are circling, the Supreme Court is on watch, and the tape is drinking in every line like it’s FOMC minutes. Strap in—this ain’t your granddad’s transition quarter.

Tariffs took center stage on Day 100. We saw a classic “pain trade” in real time: the S&P 500 sold off hard after Trump waved his reciprocal-tariff hammer (“Liberation Day,” remember?), only to bounce back when he hit the pause button on April 8. That rollercoaster in the bid/ask spread highlights the single-biggest driver right now—policy whiplash. Positioning data screamed “short gamma” as volatility spiked, but one-day massive relief rallies remind us how thin liquidity has become in this tariff-throttle tape.

Meanwhile, Trump’s muscle-flex on manufacturing capex is no mere headline grab—it’s bleeding into real dollars. Honda rerouting its next-gen Civic build to Indiana, Nissan and Hyundai sniffing U.S. soil, and a $1.75 trillion pipeline from the likes of Nvidia, Apple and Stellantis are stoking the reflation trade. We’re talking “factory build-back” flows that could tilt the yield curve steeper and keep AUD/JPY traders salivating.

On the security front, the 90 percent drop in southern-border apprehensions is the political equivalent of a curveball—bullish for the hard-power narrative, bearish for cross-border labor supply. And DOGE, Trump’s cost-cutting juggernaut, has carved out $1.6 billion in daily savings faster than a quant fund backtests a strategy. That’s fiscal drag turned fiscal brag.

But here’s the kicker: May’s looming port clog and talk of empty shelves could flip the script overnight.