Asia stocks extend gains, Tokyo lifted by weak yen

Investors look over stock prices on display terminals at a brokerage house in Yichang in central China’s Hubei province on Monday, May 25, 2015. 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 yearend. CHINATOPIX VIA AP

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 yearend.

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 percent, or 56.8 points, to 5,721.5.

Shanghai surged 3.35 percent, or 156.20 points, to 4,813.80 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 121.62 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.”

Greece ‘out of cash’

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 $1.0971 and 133.43 yen from $1.1016 and 133.86 yen in US trade as investors become worried about Greece’s ongoing bailout overhaul talks.

Interior Minister Nikos Voutsis told Mega TV that Athens has nothing with which to pay the International Monetary Fund ahead of a June 5 deadline.

“The instalments for the IMF in June are 1.6 billion euros. This money will not be given. There isn’t any to be given. This is a known fact,” he said.

Nevertheless, the minister said he believes that negotiations between Athens and its creditors were taking place “on the basis of cautious optimism that there will be a strong agreement.”

Athens has been locked in months-long discussions with the IMF and European Union over restructuring its bailout terms in order to release the last tranche of rescue money to pay its bills.

However, with both sides unable to agree a deal there are fears the country will default, which could see it tumble out of the eurozone.

On Wall Street Friday the Dow fell 0.29 percent, the S&P 500 lost 0.22 percent and the Nasdaq eased 0.03 percent.

Oil prices were mixed. US benchmark West Texas Intermediate for July delivery added seven cents to $59.79 a barrel and Brent crude for July eased three cents to $65.34 in afternoon trade.

Gold fetched $1,204.22 compared with $1,212.40 late Friday.

In other markets:

— Taipei was slightly higher, adding 6.37 points to 9,645.17.

Taiwan Semiconductor Manufacturing Co. rose 1.37 percent to Tw$147.5 while leading smartphone camera lens maker Largan Precision Co was up 0.14 percent at Tw$3,465.0.

— Wellington advanced 0.33 percent, or 18.96 points, to 5,794.98.

Contact Energy surged 11.35 percent to N$6.18 after announcing a special dividend payment, while Fletcher Building gained 0.35 percent to close at NZ$8.56.

— Manila fell 0.62 percent, or 48.64 points, to 7,761.53.

Universal Robina Corp slipped 1 percent to 199 pesos while Metropolitan Bank and Trust Co. dropped 0.64 percent to 93 pesos.

— Singapore rose 0.31 percent, or 10.67 points, to 3,460.85.

Singapore Telecom declined 1.40 percent to Sg$4.22 while e-commerce payments firm YuuZoo rallied 13.56 percent to Sg$0.34.

— Jakarta ended down 0.50 percent, or 26.79 points, to 5,288.36.

Cement manufacturer Indocement Tunggal Prakarsa jumped 0.33 percent to 22,500 rupiah, while taxi operator Blue Bird fell 2.81 percent to 8,650 rupiah.

— Bangkok closed down 1.03 percent, or 15.70 points, to 1,508.16.

Airports of Thailand dropped 2.97 percent to 294 baht, while supermarket operator Big C Supercenter lost 2.87 percent to 203 baht.

— Kuala Lumpur lost 1.13 percent, or 20.12 points, to 1,767.38.

Malayan Banking fell 0.97 percent to 9.17 ringgit, Public Bank dipped 0.94 to 18.96 while property developer IGB gained 0.71 percent to 2.85 ringgit.

— Mumbai fell 1.12 percent, or 313.62 points, to 27,643.88 points.

Mining major Vedanta Limited fell 3.59 percent to 200 rupees, while Oil & Natural Gas Corp. rose 2.12 percent to 329.30 rupees.