TOKYO (BLOOMBERG) - Traders see one-in-three odds of higher US interest rates next month as more Federal Reserve officials joined the chorus arguing the case for policy tightening before chair Janet Yellen speaks on Friday (Aug 26) in Jackson Hole, Wyoming.

Implied probability in futures markets of 32 per cent is double what is was two weeks ago, and up from zero after the UK voted to exit the European Union in June. Two-year Treasury yields, which are more sensitive to the outlook for monetary policy, were poised to rise for a second week after Kansas City Fed president Esther George repeated that higher rates were warranted, while Dallas Fed chief Robert Kaplan said "the case is strengthening" for another increase.

"The outcome of the Fed's Sept 21 meeting will be largely determined by the tone of Janet Yellen's speech at Jackson Hole," said Sean Keane, an Auckland-based analyst at Triple T Consulting and a former head of Asia-Pacific rates trading at Credit Suisse Group. If she continues the confident tone of some of her colleagues, "market expectations for a September rate increase will likely move up closer to 60 per cent to 70 per cent," he said.