TOKYO: Japanese stocks rose for a seventh day after the yen weakened as a report showed U.S. inflation firmed and Federal Reserve Chair Janet Yellen said she expects to raise interest rates this year.
Toyota Motor Corp., which gets more than three-quarters of its sales overseas, was the biggest boost to the Topix index. Tokyo Electric Power Co. jumped 5.1 percent after a report the utility won an order to build a gas-fired power plant and desalination facility in Qatar. Takata Corp. slumped 3.8 percent after carmakers announced additional recalls in Japan and Australia of vehicles with the company’s air bags.
The Topix index added 0.7 percent to 1,658.95 at the break in Tokyo, extending last week’s gain of 2.5 percent. All but five of the measure’s 33 industry groups advanced. The Nikkei 225 Stock Average climbed 0.7 percent to 20,407.02, headed for the highest close since 2000. The yen fell 0.1 percent to 121.67 per dollar after dropping 0.4 percent on Friday.
“Yellen’s comments on raising rates this year have weakened the yen, and will probably be positive for Japanese stocks,” said Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo. “Inflation is speeding up in the U.S. Japan’s rate increases and tapering will be further in the future, so it’s likely the yen will continue to weaken.”
Yellen expects to raise borrowing costs this year if the economy meets her forecasts, with a gradual pace of tightening to follow. While the labor market is nearing full strength, “we are not there yet,” she said Friday in a speech in Providence, Rhode Island. Delaying the first rate increase until employment and inflation return to the Fed’s objectives “would risk overheating the economy,” Yellen said.
http://www.bloomberg.com/news/articles/2015-05-25/japanese-stocks-rise-after-yen-slides-on-u-s-inflation-yellen
