TOKYO: Japanese stocks advanced, sending the Topix toward an eight-year high, as a weaker yen boosted earnings prospects. Bets the Federal Reserve will boost interest rates as soon as next month hit bonds, while the Aussie dollar slid after data showed unemployment matched the highest since 2002.
Japan’s Topix index gained 1 percent as of 2:08 p.m. in Tokyo after the yen weakened past 125 per dollar Wednesday for the first time in two months. Standard & Poor’s 500 Index futures retreated 0.1 percent after a 0.3 percent advance in the U.S. gauge, while Chinese and South Korean shares fell. Ten-year Australian and New Zealand bond yields rose for a second day as Treasuries maintained losses and copper climbed.
Stronger earnings in Japan helped boost shares while Australian equities dropped as one of the nation’s biggest banks announced a share sale. Traders ramped up bets the Fed will raise interest rates before the year is out as the fastest U.S. service-sector growth in a decade added to prospects for a strong monthly payrolls report Friday.
“The Topix and Nikkei are sustaining highs because overall earnings are good and that’s acting as a support,” said Soichiro Monji, the chief strategist at Tokyo-based Daiwa SB Investments Ltd., which oversees 5.8 trillion yen ($46 billion). “A U.S. rate increase in September is likely. The first increase has already been priced into a weaker yen, so the focus is on the pace of the second and third increases.”
