Markets Brace for Swings After High-Rates Mantra of Jackson Hole

Japan’s yen will be in focus when currency markets reopen at 5 a.m. in Sydney. The currency fell to its weakest this year versus the dollar as Federal Reserve Chair Jerome Powell indicated that the US could hike interest rates again, boosting yields on short-dated Treasuries. Australian bonds will give an early indication of whether yields in Asia will follow suit.

Chinese officials have steadfastly intervened to prop-up the yuan, and Japanese authorities have signaled they’re watching the yen’s movements closely. While data on Sunday showed a decline in China’s industrial profits eased in July, the slowing economic recovery and deflation risks remain an overhang for the sector. China also announced measures to support the equities market, lowering the stamp duty on stock trades for the first time since 2008 and pledging to slow the pace of initial public offerings.

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