Stocks Climb in Korea, Japan; Dollar Reverses Loss: Markets Wrap

  • U.K., U.S., China markets closed for holidays on Monday
  • Dollar reverses losses amid Fed official’s rates comments

Stocks in Japan and South Korea climbed amid low trading volume and the dollar erased losses as Federal Reserve Bank of San Francisco President John Williams said the economy is strong enough to withstand three or four interest rate increases this year.

The Kospi index headed for a fresh record and Tokyo shares were buoyed as the yen gave up early gains. The rand pared its advance after South African President Jacob Zuma survived a bid by some members of the African National Congress’s top leadership to order his removal from office. Markets are closed in the U.S., the U.K. and China. North Korea fired another missile, which appears to be a Scud variant.

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A six-week surge in global equities pushed stocks to a record high as investors bet global economic growth can withstand higher U.S. interest rates as soon as next month. While stocks have recovered from worries surrounding the prospects for President Donald Trump’s reform policies, 10-year Treasuries are on course for a fourth monthly advance amid concern inflation is lagging expectations.

Disagreement on the strength of the U.S. comes as the first hints of China’s economic performance in May suggest that a slowdown in growth is taking hold as policy makers beef up efforts to clamp down on financial risks.

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“The U.S. economy is about as close to the Fed’s dual mandate goals as we’ve ever been,” Williams said in remarks prepared for delivery in Singapore on Monday. “With the attainment of our dual mandate goals close at hand, it’s more important than ever for monetary policy to work toward what I like to call a ‘Goldilocks economy’ -– an economy that doesn’t run too hot or too cold.”

Williams doesn’t vote on monetary policy this year, but he worked closely with Fed Chair Janet Yellen when she led the San Francisco Fed and he was its director of research, and is seen as an influential voice at the central bank.

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