The decline, which teased investors yesterday even as the Bank of Japan pledged to withdraw interest rate hikes and signaled an end to the turmoil in the yen’s carry trade, signaled a turnaround today, its biggest daily gain since 2022.

The biggest credit for driving the market today was the new unemployment claims. Last week, the Fed shifted its focus from inflation to the job market, already indicating that new unemployment benefits would be the most visible indicator.

Today’s data showed the biggest decline in a year, suggesting the U.S. job market remained on a substantially stronger-than-expected footing.

The market is unlikely to raise concerns about a recession unless the unemployment rate rose to 4.3%, but weekly jobless growth rises sharply.

As concerns about a recession ease, expectations for a rate cut this year have been greatly reduced, but the market doesn’t seem too concerned. In fact, what the market wants is a gradual rate cut without a recession, not a strong one that responds belatedly to prevent a recession.

In any case, the market seems to be stabilizing. Given that the biggest factor that actually shook the market, in addition to the shock of the employment report, was the clearing of the yen carry trade, JPMorgan’s report that 75% of the market is now liquidated suggests that market volatility is likely to quiet down, along with dovish comments from the Bank of Japan.