Japan Shares Climb as Yen Extends Declines After Yellen, Kuroda

Japanese shares rose as the yen extended declines after Federal Reserve Chair Janet Yellen said the case for tightening had strengthened while Bank of Japan Governor Haruhiko Kuroda reiterated a pledge to add to stimulus if needed.

Electrical-appliance and auto makers gained after the yen sank 1.3 percent against the dollar on Friday following Yellen’s remarks at Jackson Hole and fell a further 0.1 percent in morning trading on Monday. She cited continued solid performance in the U.S. labor market. Kuroda, meanwhile, said there’s “ample space for additional easing” through quantitative or qualitative easing or deeper cuts to negative interest rates.

“The U.S. put off a rate increase in wake of Brexit, and the view seems to be that the state of the country’s economy has further improved,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. “There’s no reason to wait another few months for a U.S. rate hike.”

Traders see the likelihood of a September U.S. rate rise at 42 percent following Yellen’s remarks, up from 22 percent on Aug. 19, according to Fed futures data compiled by Bloomberg. They see the odds of higher borrowing costs by December at 65 percent.

All but two of the 33 industry groups on the Topix advanced, with volume about 1.8 percent higher than the 30-day intraday average.

• Carmaker Toyota Motor Corp. provided the biggest boost to the Topix, rising 3.8 percent, while Honda Motor Co. added 3.4 percent.
• Fujitsu Ltd. advanced 2.6 percent. The electronic-equipment maker plans to automate production of 90 percent of some mobile phones as it seeks to cut manufacturing costs by half, the Nikkei newspaper reported.
• Mitsubishi Chemical Holdings Corp. rose the most on the Nikkei 225. The company climbed 7.3 percent after SMBC Nikko Securities Inc. analyst Shinobu Takeuchi upgraded the stock to outperform from neutral.

Futures on the S&P 500 Index fell less than 0.1 percent. The underlying measure slid 0.2 percent on Friday, retreating for a third day.