Dollar Strengthens after Yellen Comments; Japanese Shares Surge

The dollar maintained gains after Janet Yellen said the American economy is strong enough to warrant higher interest rates. Japanese stocks climbed the most in two weeks while the yen fluctuated, and oil resumed gains after the biggest drop in more than a week.

Japan’s Topix index rose for a second day as the yen swung after posting its steepest fall since November on Wednesday. Asian shares elsewhere were mixed. The Bloomberg Dollar Index held on to gains after Yellen said the economy is close to the central bank’s objectives and she’s confident it will continue to improve. Toshiba Corp. shares tumbled after a report that the loss in its nuclear business may exceed the maximum the company had flagged to lenders. Gold extended Wednesday’s decline and oil headed for a second day of gains this week.

Attention was diverted away from politics as investors focused on Yellen’s faith in the economic recovery and data showing a pickup in inflation in the U.S., the U.K. and the eurozone. Her comments came a day after concerns about Trump’s policies and the implications of Brexit drove investors toward haven assets. That trend to investments perceived as safer eased ahead of Trump’s inauguration on Friday, with stocks having made little headway this week.

Here are the main movers across markets.

Currencies

· The Bloomberg Dollar Spot Index was flat at 3:27 p.m. Tokyo time after surging 1.1 percent Wednesday, the most in a month.

· The yen was little changed at 114.66 per dollar following Wednesday’s 1.8 percent slump after a seven-day rally. The South Korean won dropped 0.9 percent, after a two-day gain of 1.3 percent, following reports North Korea may be planning to launch an inter-continental ballistic missile.

· The Australian dollar rose 0.3 percent after the December jobs report beat estimates, with employment rising 13,500. The New Zealand dollar also rose 0.3 percent.

· The pound rose 0.2 percent to 1.2280 and the euro was up 0.1 percent.

Stocks

· Japan’s Topix Index and the Nikkei 225 both rose 0.9 percent, while South Korea’s Kospi added 0.1 percent.

· The Shanghai Composite fell 0.3 percent and Hong Kong’s Hang Seng lost 0.5 percent.

· S&P 500 futures were little changed after the underlying gauge rose 0.2 percent Wednesday.

Commodities

· West Texas Intermediate crude jumped 0.9 percent, paring its 2.7 percent slump on Wednesday.

· Gold lost 0.2 percent. It has fallen over the past two sessions, snapping a seven-day winning streak that was the longest since November.

Bonds

· Yields on 10-year Treasuries slid one basis point to 2.42 percent.

· 10-year Australian government bond yields climbed 8 basis points.

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