Japanese Stocks Follow U.S. Equities Higher on Outlook for Rates

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Japanese stocks rose after a Federal Reserve official said interest rates would likely stay accommodative for a longer period, boosting U.S. equities.

Inpex Corp. climbed 4.4 percent, pacing gains among energy shares after the U.S. oil benchmark jumped more than 6 percent on Monday. Koei Tecmo Holdings Co. increased 3.8 percent as the video-game developer reported stronger-than-expected preliminary earnings. Ono Pharmaceutical Co. added 1.8 percent after SMBC Nikko Securities Inc. raised its rating on the drugmaker. Asics Corp. slid 1.8 percent as Credit Suisse Group AG lowered its rating on the sneaker manufacturer.

The Topix index advanced 1.1 percent to 1,578.55 at the close in Tokyo, with all but one of its 33 industry groups rising. The Nikkei 225 Stock Average added 1.3 percent to 19,640.54. The yen traded at 119.57 per dollar after losing 0.5 percent on Monday. U.S. stocks gained after the Fed’s William C. Dudley said the pace of interest-rate increases is likely to be “shallow” once the Fed starts to tighten monetary policy.

“A delay in U.S. interest rate hikes means extremely easy monetary conditions continue and this is being taken as a plus by the stock market,” said Hajime Sakai, a portfolio manager at Tokyo-based Mito Securities Co. “Investors were shifting toward an expected rate hike in June, but now we’re seeing them rebuilding positions.”

Dudley’s comments on Monday follow weaker-than-expected U.S. economic data. A report Monday showed expansion in the service industries slowed slightly in March from the previous month. On Friday, data showed employers added the fewest workers in more than a year.

Higher Oil

Economic reports are being scrutinized by investors after the Fed said its first interest-rate increase since 2006 will be data-dependent. Fed Chair Janet Yellen said March 27 that she expects to raise rates this year, and that subsequent increases will be gradual.

Crude prices soared yesterday after Saudi Arabia raised prices for oil exports to Asia. Oil explorer Inpex added 4.4 percent to 1,386.5 yen, while Japan Petroleum Exploration Co. climbed 5.1 percent to 4,245 yen.

Koei Tecmo jumped 3.8 percent to 1,868 yen. The maker of the Dead or Alive video game series reported preliminary net income for the previous fiscal year of 9.3 billion yen ($77 million), beating its own forecast for 7 billion yen.

Ono Pharmaceutical rose 1.8 percent to 13,420 yen after SMBC Nikko raised its rating on the stock to outperform from neutral. Analyst Yasuhiro Nakazawa expects the shares to reach 16,000 yen in 12 months. The drugmaker has jumped 25 percent this year, double the Topix’s gain of 12 percent.

Asics dropped 1.8 percent to 3,215 yen after Credit Suisse lowered its rating on the company to neutral from outperform.

E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying gauge added 0.7 percent on Monday, re-opening after a holiday on Friday. Alcoa Inc. unofficially kicks off U.S earnings season on April 8.

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