By Kenan Machado

Other Asian markets down after dollar gains

A rally in the U.S. dollar weakened the Japanese yen, sending the Nikkei sharply higher Monday morning amidst broader equities weakness elsewhere in Asia.

The Nikkei Stock Average was up 2.2% after the dollar surged, on comments from Federal Reserve Chair Janet Yellen that the case for an increase in short-term interest rates has strengthened in recent months. A weaker yen helps Japanese exports.

There were expectations of hawkish commentary from the Fed and investors were cautious leading up to the speech, analysts said.

"All of the concerns and worries were addressed in this (Fed Chair Yellen's) speech over the weekend," said Alex Wijaya, a senior sales trader at CMC Markets.

The Fed comments sent U.S. shares lower on Friday, helping the stock market there notch its biggest weekly decline since the U.K.'s Brexit vote in June.

In early Asian trade, the U.S. dollar was broadly higher against most local currencies. The yen was last down 0.2% against the greenback.

Meanwhile, the Malaysian ringgit fell 0.7% against the dollar, the Indonesian Rupiah was off 0.5%, and the Australian dollar fell 0.4%.

The dollar's strength pushed commodity prices lower. Brent crude, the global benchmark, was trading down 42 US cents at $49.50 a barrel.

In Australia, the commodity-heavy S&P/ASX 200 traded 0.8% lower, with Woodside Petroleum Ltd. (WPL.AU) falling 1.1% and Oil Search Ltd. (OSH.AU) declining 1.9%. Rio Tinto Ltd. (RIO) and BHP Billiton Ltd. (BHP.AU) fell 0.5% and 0.1% respectively.

Elsewhere in Asia, stocks were also under pressure as Yellen's comments affirmed expectations of higher U.S. rates this year, and could trigger fund flows into U.S. dollar assets.

   The Shanghai Composite Index   was last down 0.3%, while Hong Kong's Hang Seng Index   lost 0.4%. 
 

(END) Dow Jones Newswires

August 28, 2016 22:37 ET (02:37 GMT)

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