United States Non Farm Payrolls

Data Source: tradingeconomics.com

 

In contrast, signals from the Bank of Japan had a more structural impact on global liquidity. In early January, Bank of Japan Governor Kazuo Ueda, in his first public appearance of the year, reiterated that the BOJ would continue its monetary policy normalization as long as inflation and economic performance meet expectations. While this statement did not constitute an immediate policy surprise, it reaffirmed Japan’s systematic exit from a prolonged ultra-loose framework. The deeper implication is that as the last major central bank maintaining long-term ultra-loose policy, Japan’s “normalization” fundamentally reshapes global liquidity distribution. As interest rate differentials between Japan and the U.S. gradually narrow, the attractiveness of global carry trades diminishes, and discussions on the repatriation of Japanese capital from overseas risk assets intensified. In the long run, this will systematically reduce the incentive for domestic Japanese funds to hold U.S. Treasuries, driving capital back home, constraining long-end U.S. Treasury demand, and indirectly raising the discount rate baseline for global risk assets.

 

Entering the first trading week of 2026, the crypto secondary market exhibited a typical "bull-trap" volatility pattern—rising early before retreating. At the start of the week, driven by a recovery in risk appetite, BTC reclaimed the $90,000 psychological barrier and repeatedly tested the $94,000 level, hitting a weekly high of approximately $94,700. ETH rose by about 10% during the same period, returning above $3,200 and significantly outperforming BTC, signaling a tactical rotation into high-beta assets. XRP was particularly notable, surging over 25% to approximately $2.20, which buoyed multiple mainstream altcoins and briefly spiked speculative sentiment. However, following Friday's NFP data, interest rate expectations tightened rapidly, causing a sharp reversal in market sentiment. BTC pulled back from its highs to retest the $90,000 level, while ETH fell to approximately $3,085, and other mainstream assets like XRP and SOL also retraced their gains. Overall, while the total crypto market cap briefly surpassed $3 trillion with a weekly gain of roughly 5%, the growth was concentrated in the early days of the week. The single-day retreat triggered by the NFP data nearly erased previous optimism, highlighting the market's extreme sensitivity to macro rate expectations. Once the "delayed rate cut" narrative gains traction, capital swiftly exits high-beta assets. This structure—dominated by macro expectations despite no deterioration in fundamentals—remains the core challenge for the crypto market in early 2026.

 

Similarly, spot ETF flows mirrored this "first-in, first-out" pattern. Early in the week, amid warming risk appetite, both Bitcoin and Ethereum spot ETFs recorded net inflows. Bitcoin ETFs, in particular, saw single-day inflows reach relative highs not seen in months, indicating a tactical return of short-term allocation capital. However, as macro data landed, sentiment turned cautious, and ETF flows slowed or began to see outflows. Overall, institutional behavior at the ETF level remains highly consistent with price action, reflecting a tactical allocation strategy where traditional capital remains on the sidelines until macro uncertainties clear.