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Tokyo, Wall St. shares boosted by Fed rate hike talk

Japanese shares pushed sharply higher and Wall Street got a boost Monday by rising expectations of an interest rate increase this year by the US Federal Reserve. The rate hike talk, which came out of the Fed's central banking symposium at the end of last week, sent the dollar up past 102 yen, after having dropped to 99.9 yen last week. Later, the dollar eased to 101.88 yen. With the cheaper yen improving the export competitiveness of Japan's big exports like auto companies, Tokyo stocks reacted positively, the Nikkei average jumping 2.3 percent. Wall Street, meanwhile, took the rate signals from the Fed as a sign of confidence in the US economy, supported by solid consumer spending data for July on Monday that pointed to strong US economic growth in the third quarter. The Dow Jones Industrial Average gained 0.6 percent and the S&P 500 0.5 percent, with the banking sector strong on expectations that higher rates from the Fed will boost their lending margins. "The market is up and the reason for it is obviously we got some pretty good economic news, consumer spending up again showing the economy is supported by the consumer," said Peter Cardillo of First Standard Financial. Elsewhere, however, traders seemed less certain. Other Asian markets and those in Europe dipped as they tried to second-guess the Fed's timing of its next rate rise. Frankfurt, Hong Kong and Paris all lost 0.4 percent. London was closed for a holiday. Oil prices fell modestly amid rising doubts about the potential for a meeting between OPEC producers and Russia in Algeria next month to take action to support crude prices by stabilizing, if not reducing, output. In New York, West Texas Intermediate fell 66 cents to $46.98 a barrel. In London, Brent crude also lost 66 cents, to $49.26 per barrel. "Market talk seems to have shifted to stances that could spoil an agreement to cap output, with some focusing on Iraq’s recent request for oil companies to boost production," Timothy Evans of Citigroup said in a client note. - Key figures at 2100 GMT - New York - DOW: UP 0.6 percent at 18,502.99 (close) New York - S&P 500: UP 0.5 percent at 2,180.38 (close) New York - Nasdaq: UP 0.3 percent at 5,232.33 (close) Frankfurt - DAX 30: DOWN 0.4 percent at 10,544.44 points (close) Paris - CAC 40: DOWN 0.4 percent at 4,424.25 points (close) London - FTSE 100: Closed for public holiday Tokyo - Nikkei 225: UP 2.3 percent at 16,737.49 (close) Shanghai - Composite: DOWN 0.28 points at 3,070.03 (close) Hong Kong - Hang Seng: DOWN 0.4 percent at 22,821.34 (close) Euro/dollar: DOWN at $1.1187 from $1.1195 Dollar/yen: UP at 101.88 yen from 101.77 yen Friday Pound/dollar: DOWN at $1.3105 from $1.3135