Is Powell sure about the trend of high US Treasury yields? There are two major suspense in the foreign exchange market in the new week

At the annual meeting of U.S. and European policymakers in Jackson Hole,After interest rates are likely to remain high for longer, traders are bracing for a cautious start to the week.

While the Australian dollar and yen were little changed after the Asian session opened, the yen hovered near its lowest level this year as Australian bonds opened thinly and investors digested the latest moves by China to support its equity markets.

Last Friday, Federal Reserve Chairperson Jerome Powell said,The United States may raise interest rates again, pushing up short-term Treasury yieldsSpeaking at the Federal Reserve Bank of Kansas City's annual symposium in Jackson Hole, Wyoming, Powell said the Fed was "prepared to raise rates further if appropriate", although he stressed that monetary policy would continue to be influenced by economic data.

Meanwhile, European Central Bank President Christine Lagarde has vowed to keep borrowing costs as high as necessary until inflation returns to target.

Treasury prices fell after Mr. Powell's speech, pushing the yield on the policy-sensitive two-year Treasury up to 5.09 per cent, while the real yield on the five-year Treasury surged to its highest level since 2008. The yen fell to a year low of 147 against the dollar.Questions have been raised again about whether Japan will intervene to prop up the yen.

Citi analysts Andrew Hollenhorst and Veronica Clark wrote after Powell's speech, "Powell's clear and deliberate reaffirmation of the macroeconomic case for a hawkish bias in Fed policymaking largely confirms the trend of higher Treasury yields over the past two months”。

The conversation over the Fed contrasts sharply with the Bank of Japan, which has signalled it is closely monitoring the yen.

Speaking in Jackson Hole on Saturday, Bank of Japan Governor Kazuo Ueda did not comment on the currency issue, but said,Price growth remains below the central bank's target, which explains why officials continue to implement current monetary policy.

Asian currencies have fallen 2 per cent against the US dollar this month, according to a foreign media indicator. "Ed Al-Hussainy, global rates strategist at Columbia Threadneedle Investments, said:"We are more likely to see a larger intervention in the yuan, and we may also see some verbal intervention in the yen”。

The Federal Reserve's tough stance could also exacerbate the pain in the region's stock marketsThe MSCI Asia Pacific index is likely to record its largest monthly decline in nearly a year.

Industrial foreign exchangeAccording to media data, as of August, global funds have withdrawn about $5.90 billion from Asian emerging market stocks excluding China.

Toshiya Matsunami, a strategist at Tokyo-based Nissay Asset Management, said that in Asia, "If Treasury yields rise to 4.5%, high-tech stocks will be vulnerable". Benchmark 10-year Treasuries currently yield around 4.25%." Companies related to PC and smartphone chips will be in a tough spot ".