Asia stocks extend gains, Tokyo lifted by weak yen


HONG KONG: Asian markets advanced on Monday, with Tokyo boosted by a weaker yen after the US Federal Reserve chief stuck to her plan to raise interest rates by year-end.

The euro suffered further losses as Greece warned it did not have enough money to service its debts next month without the rest of its bailout cash.

Tokyo closed 0.74 percent higher, adding 149.36 points to reach a 15-year high of 20,413.77, while Sydney jumped 1.00 percent, or 56.8 points, to 5,721.5.

Shanghai was up 2.58 percent in late trade as traders moved into undervalued stocks.
Hong Kong and Seoul were closed for public holidays.

Fed chief Janet Yellen said on Friday she expects to raise rates from historic lows “at some point this year,” warning that a delay could risk overheating the economy. However, she also said there were still weaknesses, including slackness in the job market despite unemployment at 5.4 percent.

Her comments came two days after minutes of the Fed’s April policy board meeting made it clear that slow growth in recent months meant it was not expecting a rise before late July.

Adding to the dollar’s strength was news from the US Department of Commerce that core consumer prices—which exclude food and energy—jumped 0.3 percent in April from March, the largest one-month rise in more than two years.

The dollar was at 121.59 yen Monday, against 121.52 yen in New York and sharply up from 120.71 in Tokyo earlier Friday.

“Inflation is speeding up a little in the US, and we can see the intention to raise rates sometime this year,” said Shoji Hirakawa, chief equity strategist at Okasan Securities Co in Tokyo.

“When we consider the US versus Japan, rates will be higher in the States. Japan’s rate hikes and tapering will be further into the future.”

Japan has for the past two years been embarking on a bond-buying program that pumps cash into the financial markets—which hits demand for the yen—in a bid to defeat deflation.

The euro fell to $1.0990 and 133.73 yen from $1.1016 and 133.86 yen in US trade as investors become worried about Greece’s ongoing bailout overhaul talks.



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