There was a lack of spark in the bond market at the end of last week in the aftermath of Fed chair Powell's speech. But perhaps one can argue that traders already cast their vote a week earlier when 10-year Treasury yields broke back above its 100-day moving average (red line) and proceeded to climb above 3% all before the main event.
The message by central banks at Jackson Hole was clear and it really isn't invalidating the push higher in yields in the past week. However, I'm not certain if yields are going to find the next leg higher just based on this. As things stand, the Fed has set out their stance but the September decision and any subsequent ones will largely be dependent on the data.
For this week, be reminded that we will see the US jobs report i.e. non-farm payrolls on Friday. That is one of the bigger ones to watch before the FOMC meeting next month.
In any case, there is good reason to expect yields to keep elevated in the meantime. That should bode well for USD/JPY to stay underpinned and the move higher in yields today is already translating to a near 1% gain in the pair - which is now trading at 138.83 on the day.
