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

The Nikkei Stock Average was up 2.2% as the dollar gained after Federal Reserve Chairwoman Janet Yellen signaled growing conviction that the central bank will raise short-term interest rates in the weeks or months ahead. A weaker yen helps Japanese exports.

Shares in major Japanese exporters rose sharply, with Toyota Motor Corp. adding 4%, Honda Motor Co. gaining 3.5%, and Nissan Motor Co. rising 2.6%.

The market expected hawkish commentary from the Fed and investors were cautious leading up to last week's central banking summit in Jackson Hole, Wyo., analysts said.

"All of the concerns and worries were addressed in [Ms. Yellen's] speech," said Alex Wijaya, a senior sales trader at CMC Markets.

Any doubt the markets had about the Fed's intentions were put to rest by subsequent comments from Fed Vice Chairman Stanley Fischer.

"I thought what Fischer said was a driver" of the currency moves, said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

"He didn't rule out the possibility of a rate increase in September," said Mr. Fujiwara.

The comments sent stocks in the U.S. lower on Friday, helping the market there notch its largest weekly decline since the U.K.'s vote to leave the European Union in June.

In morning Asian trade, the U.S. dollar was broadly higher against most local currencies. The yen was last down 0.3% against the dollar.

Meanwhile, the Malaysian ringgit fell 0.7% against the dollar, the Indonesian Rupiah was off 0.5%, and the Australian dollar fell 0.3%.

The dollar's strength pushed commodity prices lower. Brent crude, the global benchmark, was recently trading down US$0.56 at $49.35 a barrel.

In Australia, the commodity-heavy S&P/ASX 200 fell 1.1%, with Woodside Petroleum Ltd. falling 1.8% and Oil Search Ltd. declining 2.3%. Rio Tinto Ltd. and BHP Billiton Ltd. fell 1.2% and 0.4%, respectively.

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

"A move at the September meeting remains less likely but a move before year-end now looks a distinct possibility should U.S. data continue to improve," said Lee Ferridge, head of multiasset strategy at State Street Global Markets.

Hong Kong's Hang Seng Index was recently down 0.4%, while Singapore's Straits Times Index was off 0.7%.

The Hong Kong-traded shares of China Petroleum & Chemical Corp., or Sinopec, were down 0.9% after China's biggest refiner reported a 22% decline in net first-half profit from a year earlier to 19.92 billion yuan (US$2.98 billion).

In South Korea, the Kospi was down 0.2% with shares of Hyundai Motor Co. falling to their lowest level in a week, after its workers rejected a wage deal agreed to by their leaders and management, a rare move that could signal more industrial action and production losses at South Korea's largest auto maker. Shares of the auto company were recently down 1.1%.

Gold prices retreated to a month's low after the Fed's comments, even though the broad outlook for the commodity remains bullish, due to demand for haven assets on debt worries in Italy and the coming U.S. elections.

Gold was last trading 0.2% higher at $1,317.36 per ounce.

Ese Erheriene, Kosaku Narioka, In-Soo Nam and Biman Mukherji contributed to the article.

Write to Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

August 29, 2016 00:15 ET (04:15 GMT)

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