World stocks mostly higher, strong dollar buoys Japan

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange on Sept. 2, 2014.


TOKYO - World stocks were mostly higher Tuesday as investors awaited central bank meetings later this week in Europe and Japan as well as U.S. employment figures. The U.S. dollar extended its rally against the euro and the yen on expectations the Fed will be the first major central bank to raise interest rates.

In early European trading, Britain's FTSE 100 gained 0.3 percent to 6,845.33 while Germany's DAX rose 0.9 percent to 9,568.19. The CAC-40 in France was up 0.5 percent to 4,400.08. Futures augured gains on Wall Street after being closed Monday for a public holiday. Dow futures were up 0.2 percent to 17,124. Broader S&P 500 futures rose 0.2 percent to 2,005.50.

Traders will be focusing on the U.S. employment report for August due Friday. Investor confidence over the U.S. economy has risen following several months of strong growth in hiring and corporate profits and a series of major corporate acquisitions.

Japan's Nikkei 225 gained 1.2 percent to 15,668.60 while Hong Kong's Hang Seng was flat at 24,750.10. China's Shanghai Composite jumped 1.4 percent to 2,266.05 and Australia's S&P/ASX 200 added 0.5 percent to 5,658.50. Southeast Asian stock markets rose while South Korea's Kospi dropped 0.8 percent to 2,051.58.

Japan's government reported Tuesday that average wages rose 2.6 percent in July from a year earlier, mostly helped by bonus payments. Increases in household incomes are a crucial part of Japan's economic revival strategy and the July figures are a rare positive development on that front. The yen's recent weakness, meanwhile, potentially is a boon for export manufacturers.

Indicators such as power generation, steel output and property sales point to continued weakness in the world's No. 2 economy, which has raised expectations of additional stimulus and boosted Chinese stocks. But Hong Kong, which has heavy exposure to the troubled Chinese property market, was lower. It also has been shaken by rising friction between China's communist leaders and local protesters demanding a direct say in the choice of Hong Kong's leader.

"We still expect China's overall economy to cool toward the year's end, and to stay weak through 2015," says Wang Tao, an economist at UBS in Hong Kong.

The Ukraine crisis and weak European economic data have combined to hurt the euro, taking it to near year-lows. On Tuesday, the euro fell to $1.3115 from $1.3132 late Monday. The dollar rose to 104.88 yen from 104.35 yen.

U.S. benchmark crude for October delivery was down 71 cents at $95.24 a barrel in electronic trading on the New York Mercantile Exchange.