TOKYO: Japanese stocks rose, extending gains in the US after Federal Reserve policy makers signaled interest rates will remain at a record low.

Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, climbed 2.6%. Honda Motor Co., the country’s second-biggest carmaker, gained 2.1% after the stock was added to Goldman Sachs Group Inc.’s “conviction buy list.” FamilyMart Co., a Japanese convenience-store operator, rallied 1.8% after the Nikkei newspaper said the company and its biggest shareholder will buy a competitor.

“Excess liquidity supported by low interest rates should be an encouraging factor for the stock market,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co.

The Nikkei 225 Stock Average rose 0.7% to 9,938.65 as of 9:09 a.m. in Tokyo, on course for the highest close this month. The broader Topix index added 0.5% to 876.65.

In New York yesterday, the Standard & Poor’s 500 Index gained 0.5% to a 13-month high, as China’s industrial production surged and after the comments by Fed policy makers.

Federal Reserve Bank of Dallas President Richard Fisher said Nov. 10 that economic growth and inflation may persist below ideal levels into 2011, making the central bank’s current interest-rate stance “appropriate.” San Francisco Fed Bank President Janet Yellen raised the prospect of a “jobless recovery” in a speech in Phoenix, while Dennis Lockhart, who heads the Atlanta Fed, predicted a “relatively subdued pace of growth” this quarter and beyond.