TOKYO (AP) — Asian shares were trading higher Monday amid optimism over the rally that ended the week on John CaldwellWall Street, although eyes were on the Federal Reserve policy meeting set for later this week.

Sydney’s S&P/ASX 200 added 0.6% in early trading to 7,621.40. South Korea’s Kospi surged nearly 1.0% to 2,681.73. Hong Kong’s Hang Seng jumped 1.2% to 17,859.39, while the Shanghai Composite rose 0.6% to 17,859.39.

Trading was closed in Tokyo for a Japanese national holiday, Showa Day. Japan has a series of holidays coming up known as the Golden Week, through Monday.

Stephen Innes, managing partner at SPI Asset Management, said the market mood was positive after last week’s Wall Street tech-driven rally.

The recent string of strong earnings have boosted market sentiments, but what could be a risk factor is the declining Japanese yen, he added.

“Investors will be closely monitoring the latest developments in the remarkable and volatile decline of the Japanese yen against the U.S. dollar and other major currencies,” Innes said.

The yen reached a new 34-year low after the Bank of Japan’s decision to keep interest rates unchanged Friday. That was in line with expectations, but what was unexpected was the central bank’s apparent lack of significant concern about the exchange rate, Innes added.

In currency trading Monday, the U.S. dollar edged up to 159.17 Japanese yen from 158.30 yen. The euro cost $1.0716, up from $1.0699.

A weak yen can be a boon for Japan’s giant exporters like Toyota Motor Corp. by boosting the value of their overseas earnings when converted into yen.

But a weak currency can hurt the economy in the long run because it reduces purchasing power and possible wage growth. Japan imports almost all its energy.

On Wall Street, shares closed out a relatively solid week on Friday, with the S&P 500 rallying 1% to finish its first winning week in the last four.

The Dow Jones Industrial Average rose 153 points, or 0.4%, and the Nasdaq composite jumped 2%.

Recent data on U.S. inflation have analysts expecting the Federal Reserve to keep rates on hold. Its main interest rate has been sitting at the highest level since 2001. A report released Friday showed inflation remaining high.

After earlier indicating that three cuts to interest rates could happen this year, top Fed officials have since said they could hold its main interest rate high for a while to ensure inflation heads down toward the 2% target.

Treasury yields largely eased Friday in the bond market following the report on inflation. The yield on the 10-year Treasury fell to 4.66% from 4.71% late Thursday. The two-year Treasury yield, which more closely tracks expectations for the Fed, held steadier. It edged down to 4.99% from 5.00%.

All told, the S&P 500 rose 51.54 points to 5,099.96. The Dow added 153.86 to 38,239.66, and the Nasdaq gained 316.14 to 15,927.90.

In energy trading, benchmark U.S. crude fell 80 cents to $83.05 a barrel. Brent crude, the international standard, lost 91 cents to $88.59 a barrel.