The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0508 GMT - Japan's 10-year government bond auction shows mixed signs as monetary policy uncertainty in the U.S. and Japan rattles global fixed-income markets. The auction's tail--the difference between the average and lowest accepted prices--narrowed to 0.12 from 0.46 at the previous sale in August. The bid-to-cover ratio, another key gauge of investor demand, also improved to 3.29 from 2.56. However, the lower-than-expected minimum accepted price signals underlying caution among buyers as Bank of Japan rate-hike expectations stoke yield volatility and raise prospects of higher yields. The benchmark 10-year JGB yield briefly rose to 3% on Tuesday for the first time since September 1996. (megumi.fujikawa@wsj.com)

0508 GMT - Federal Reserve Chairman Kevin Warsh's comments at Jackson Hole reinforced the Fed's commitment to the 2% PCE inflation target, and the market responded by assigning a higher probability to rate hikes down the road, Madison Investments' Mike Sanders says in a note. "Warsh appears focused on using the Fed funds rate as the primary policy tool, keeping the Fed focused on the front end of the yield curve while the Treasury deals with other parts of the curve," the head of fixed income says. If the Fed is going to raise rates sometime in the next three to six months, that is already reflected to some degree in the five- to seven-year part of the curve, where real yields remain attractive, Sanders says. The PCE indicator is the Fed's preferred gauge of inflation.