Huo Xing Finance reports that on September 10, QCP released its macro theme report for September 10, stating that the yen recently rose rapidly from around 160 to approximately 154, primarily driven by the Bank of Japan’s monetary policy normalization, unwinding of carry trades, and a weaker U.S. dollar. Japan’s foreign exchange reserves declined by $87.8 billion in August, with securities holdings falling by the same amount—possibly linked to yen intervention funding arrangements—prompting market participants to remain vigilant against further intervention risks. On inflation, QCP believes the surge in PCE inflation this spring was primarily driven by energy prices. From February to May, non-durables contributed approximately 0.85 percentage points to core PCE year-over-year growth, while energy alone contributed about 0.89 percentage points; by July, energy’s contribution had fallen to 0.48 percentage points. However, core PCE remains at 3.3%, indicating that the decline in energy prices has not fully alleviated the Fed’s concerns about broad-based inflationary pressures. The labor market continues to show resilience. U.S. non-farm payrolls added 162,000 jobs in August, significantly exceeding market expectations, while June and July employment data were collectively revised down by 55,000 jobs; the three-month average job growth stands at approximately 71,000. QCP believes the labor market has not shown clear signs of slowing, supporting the “soft landing” narrative, though household borrowing costs remain elevated. Meanwhile, shipping through the Strait of Hormuz is constrained, and the U.S. Strategic Petroleum Reserve (SPR) stands at only about 286.6 million barrels—historically low—suggesting that inflationary risks from energy supply shocks remain persistent. Brent crude has recently rebounded above $100 per barrel. QCP raises a key question: If employment remains resilient while inflation is primarily driven by energy, can the Fed maintain its stance of holding rates steady this year? If core inflation remains stubbornly high, expectations of policy tightening could rekindle.
QCP: Yen Strength, Strong Employment, and Energy Shocks Test the Fed’s Policy Path
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Summary
QCP’s latest macro report dated September 10, 2026, notes the yen rising from 160 to 154, driven by Japan’s monetary normalization and a weaker U.S. dollar. Regulatory policy and liquidity in crypto markets remain under pressure amid shifting foreign exchange flows. Japan’s foreign exchange reserves declined by $8.78 billion in August, alongside a reduction in securities holdings, possibly due to yen intervention. U.S. nonfarm payrolls increased by 162,000 in August, slightly revised downward. Energy shocks continue, with Brent crude above $100/barrel and the Strategic Petroleum Reserve at low levels. QCP questions whether the Fed can remain passive if inflation remains driven by energy factors.
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