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Asian Stocks Rise on Improving Economic Outlook; Yen Weakens

March 23 (Bloomberg) — Stocks rose in Asia, led by mining and financial companies, and commodity prices advanced on signs that the region’s economic growth is accelerating. The yen weakened as investors sought higher-yielding assets.

The MSCI Asia Pacific Index climbed 0.3 percent to 124.63 as of 2:42 p.m. in Tokyo. Copper prices gained for a second day while futures on the U.S. Standard & Poor’s 500 Index were little changed. The yen fell versus 15 of 16 major counterparts.

Investors are growing more confident that Asia will continue to lead the global recovery after Bank of Japan board minutes showed some members see the economy improving, and economist surveys pointed to faster growth in Malaysia and New Zealand. Pacific Investment Management Co., manager of the world’s biggest bond fund, said investors should buy Asia- Pacific rather than European and U.S. debt because of the region’s stronger economic outlook.

“We’re starting to see signs of normalization,” said Matt Riordan, who helps manage $5.5 billion at Paradice Investment Management in Sydney. Expansion by companies “shows some underlying level of confidence that things are getting back towards some sort of normal state.”

Analysts have increased their earnings per share forecasts for companies in the MSCI Asia Pacific Index this fiscal year by 2.8 percent in the past four weeks, according to data compiled by Bloomberg.

Mining Stocks

Australia’s S&P/ASX 200 Index rose 0.9 percent, Hong Kong’s Hang Seng Index climbed 1 percent and the Philippine Stock Exchange Index increased 1.5 percent, the most in a month. The Nikkei 225 Stock Average lost 0.4 percent in Japan, where markets were closed yesterday for a national holiday.

BHP Billiton Ltd., the world’s largest mining company, gained 1.1 percent and Rio Tinto Group, the third-biggest miner, advanced 0.9 percent. Copper for three-month delivery rose 0.3 percent to $7,475 a metric ton.

Bank of China Ltd., the country’s third-largest lender by market value, advanced 2.5 percent in Hong Kong trading. The bank, which reports earnings today, may say net income rose 22 percent, according to the average estimate of 15 analysts surveyed by Bloomberg.

Thailand’s SET index climbed 1 percent, extending its lead as Asia’s best performer this month. JPMorgan Chase & Co. said the measure will outperform Southeast Asian markets as valuations and easing political concerns draw foreign investors.

Balanced Growth

Some Bank of Japan members “were of the view that upside and downside risks were becoming balanced” even as deflation deepens, the minutes of the central bank’s Feb. 17-18 meeting show. In the Philippines, the central bank will meet with Standard & Poor’s and Fitch Ratings next month to seek a credit- rating upgrade, Governor Amando Tetangco said.

U.S. futures rose less than 0.1 percent. Stocks advanced yesterday, erasing an earlier drop, as drugmakers gained after the House of Representatives passed the biggest overhaul of the health-care industry in 40 years.

The yen declined to 90.34 to the dollar from 90.14 and weakened against the euro for the first time in five days as speculation Asia’s recovery is intact reduced demand for Japan’s currency as a refuge. The yen slipped to 122.43 per euro in Tokyo from 122.21 yen in New York yesterday.

The euro strengthened after Luxembourg’s Jean-Claude Juncker, who heads the group of euro-region finance ministers, said the European Union will not “abandon” Greece.

Greek Aid

European Central Bank President Jean-Claude Trichet spoke yesterday against offering low-interest loans to Greece, heightening the chance that it will leave a March 25-26 summit empty-handed. The Greek 10-year bond yield rose 10 basis points to 6.44 percent. That widened the spread over equivalent- maturity German debt to 337 basis points, the most since Feb. 25.

Asia’s economic recovery is “sustainable,” while the risk of a “policy mistake” may weigh on developed markets, Brian Baker, Pimco Asia Ltd.’s chief executive officer, said in an interview.

The New Zealand economy will grow 3.1 percent in the year to March 31, 2011, the Wellington-based New Zealand Institute of Economic Research Inc. said today, citing the average estimate of 10 economists surveyed. Three months ago, analysts forecast a 2.8 percent expansion.

Malaysia’s economy may expand 5.5 percent this year after shrinking 1.7 percent in 2009, according to the median estimate of seven economists surveyed by Bloomberg News. The country’s central bank releases its forecast tomorrow.

Bond Risk

The cost of protecting Asia-Pacific bonds from non-payment decreased. The Markit iTraxx Australia Series 13 index fell 3 basis points to 87.5 basis points, Citigroup Inc. prices show. The Markit iTraxx Asia Series 13 index of 50 investment-grade borrowers outside Japan fell 3 basis points to 103 basis points, according to Citigroup. Credit-default swap indexes are benchmarks for protecting bonds against default, and a decrease shows improving perceptions of credit quality.

Crude oil traded near $82 a barrel in New York after rising on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the world’s biggest energy consumer. Crude oil for May delivery was at $81.62 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange.