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Filled jobs rose 0.2% m/m in March but are still down 1.5% y/y after being flat and down 1.6% y/y in February. However, the 3-month annualised rate at 0.4% turned positive for the first time since April 2024, signalling that Q1 employment may be flat to slightly higher on the quarter when labour market data is released on May 7. 

NZ employment q/q%

• Labour demand remains weak but is showing some tentative signs that it has begun to gradually recover. 3-month momentum is improving for filled jobs and also SEEK job ads which rose 8.7% annualised in March. While vacancies are still down 15.4% y/y, they are off the low of -34.8% in June.
• SEEK applicants/job index shows that labour supply remains robust. It rose in the 3 months to February and was up 31.3% y/y with 3-month momentum annualised at almost 19%.
• The increase in March filled jobs was broad based across sectors with primary rising 0.4% m/m, goods-producing +0.1% and services +0.2%. Construction has taken the brunt of labour shedding over the last year down 6.1% y/y followed by admin & support services -5.7% and manufacturing -2.2%, while health care is up 1.7% y/y.
• Young people have seen the largest losses with filled jobs of 15-19 year olds down 10% y/y, while for 35-39 years they’re up 2.2% y/y.

NZ filled jobs vs SEEK job ads

Headlines have crossed from the WSJ that US President Trump will soften tariffs on the automotive sector. The WSJ notes that: "President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S., according to people familiar with the matter." (see this link).  

• Reuters added that these actions are expected to take place tomorrow, per comments from the Whitehouse(which should be Tuesday US time).
• At this stage the market reaction hasn't been large in the US equity futures space, which still sit modestly down in the red (but up from session lows).
• We did see late last week hints that tariff reprieve could be coming for the autos sector.  

The overnight range was 141.99 - 143.89, Asia is currently trading around 142.25. A strong bounce late in US stocks off their lows, but the price action in USD/JPY did not reflect it. The market seems  to believe this bounce in risk could be fleeting and is looking to add to JPY longs on any meaningful bounce.

• There seems to be a wait-and-see mood ahead of the Bank of Japan's monetary policy meeting and the release of U.S. employment statistics this week.
• (Bloomberg) - “ The Dallas Fed’s gauge of Texas manufacturing activity weakened significantly in April, with survey respondents describing tariff- induced turmoil as “chaos” and “insanity”. Business activity plunged to its worst reading since May 2020.”
• Kyodo News, via BBG - “The Bank of Japan is to maintain its interest rate at the current level of around 0.5% at its monetary policy meeting to be held on the 30th and 1st May. It is expected to lower its forecast for real gross domestic product (GDP) growth, which is released every three months. The bank will stick to its policy of raising the policy interest rate, but will give priority to assessing the tariff negotiations between the US Trump administration and the Japanese government, as well as trends in financial markets.”
• The Supply on a 143 handle proved to be too much on the day, bounces back to 143 should continue to see some supply, then more importantly the 145/146 area should once more offer good levels for sellers to reengage. 
• CFTC data shows Asset managers continuing to add to JPY longs, leveraged funds are now also beginning to build longs.
• Note Japan markets are closed today. 

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg