TOKYO, Feb 9 — Japanese stocks rose after the yen fell against the dollar as a surge in US payrolls fueled bets the Federal Reserve will raise interest rates sooner.

Honda Motor Co., which gets 47 per cent of revenue from Northamerica, advanced 1.4 per cent. Nippon Telegraph & Telephone Corp. jumped 4 per cent and is headed for the highest close since 2001 after reporting better-than-expected earnings. Dai-ichi Life Insurance Co. rose 2.3 per cent after Bloomberg News reported the insurer is seeking closer ties with Resona Holdings Inc. to boost sales. Olympus Corp. lost 1.9 per cent to be the second-biggest drag in the Topix index after reporting net income that missed estimates and saying a US probe into its medical business could hurt earnings.

The Topix advanced 0.4 per cent to 1,423.22 as of 10.09am in Tokyo with almost three stocks rising for each that fell. The Nikkei 225 Stock Average added 0.3 per cent to 17,701.83. The yen traded at 118.90 after falling 1.3 per cent on Friday following a report showing US employers added workers and boosted wages more than expected. The yield on Treasury two-year notes jumped the most since 2010 as investors reaffirmed expectations of an interest-rate hike later this year.

“The short-term momentum in US employment was stronger than we expected,” said Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo. “With the spike in US two- year note yields spurring yen weakness, that backdrop should serve as a catalyst for gains in Japanese stocks.”

Payrolls, wages

US non-farm payrolls increased by 257,000 in January, capping a total gain of 1 million workers since November, the strongest three-month increase in 17 years. Wages jumped 0.5 per cent, the most since November 2008.

Treasuries tumbled after the data, pushing yields higher on renewed speculation the Fed may begin raising interest rates in the first half of this year. The probability of a hike by June, based on trading in futures and options, rose to 26.9 on Friday from 17.6 per cent the day before, data compiled by Bloomberg show. The odds of an increase by September were 59.1 per cent, up from 44.5 per cent.

Exporters rose after the dollar gained against the yen. Honda advanced 1.4 per cent to 3,838.5 yen. Funai Electric Co., an electronics-maker which gets more than two-thirds of revenue from the US, jumped 3.9 per cent to ¥1,382 (RM41.40)

Nippon Telegraph rose 4 per cent to ¥7,148, headed for the highest close since June 2001. The company reported third- quarter net income rose to ¥159.6 billion, beating analyst expectations of ¥132.9 billion.

Dai-Ichi, Resona

Dai-Ichi Life Insurance rose 2.3 per cent to ¥1,695.5. Bloomberg News reported the insurer will buy a stake in lender Resona to boost sales of insurance products through Resona’s branches. Resona gained 2.1 per cent to ¥635.2.

Olympus dropped 1.9 per cent to ¥4,045 after the endoscope-maker said a US probe in to its medical business may impact earnings. The company also posted weaker than expected earnings, with net income falling 30 per cent to ¥9.6 billion, below expectations of ¥12.3 billion.

Futures on the Standard & Poor’s 500 Index fell 0.5 per cent after the underlying gauge slumped retreated 0.4 per cent on Friday. Finance leaders of the G20 meet in Istanbul today to discuss items including Greece’s rejection of bailout terms. — Bloomberg