Japan's Stocks Rise as Fed-Cut Bets, US-Share Rally Lift Mood  Japanese stocks climbed Monday as a surge in US equities following Jerome Powell's dovish comments at a Federal Reserve gathering bolstered sentiment, outweighing concerns over a stronger yen. 

The broader Topix rose as much as 0.8% in early trade, with the blue-chip Nikkei 225 gaining as much as 1.2%. Tech, autos and trading houses lifted the Topix the most.

The Dow Jones Industrial Average reached a record Friday after a speech by Powell led traders to boost wagers on an interest-rate cut as soon as next month. The S&P 500 gained the most since May as investors bought shares that tend to do well on lower rates. 

"Japanese equities will get a boost, in my view, due to sentiment improvement," said Anna Wu, cross-asset strategist at VanEck in Sydney. 

The yen was steady after surging 1% on Friday. Any drag on stocks from a stronger yen will likely be minimal, as "equities were suppressed pre-Jackson Hole," leaving room for upside, Wu said.

SoftBank Group Corp., Advantest Corp. and Keyence Corp. were among the largest contributors to the Topix's rise. Tech names could be the biggest winners in Japan if the Fed reduces rates, said Tim Waterer, chief market analyst at KCM Trade.

"Lower US rates could see investors looking further afield for returns, and Japan's tech sector could be the recipient of greater capital inflows as a result," Waterer said.

The yen held gains after Bank of Japan Governor Kazuo Ueda said he expects a tight labor market to keep upward pressure on wages. His remarks are likely to support growing market speculation of another interest rate hike this year.

Source: Bloomberg