Asian stocks advanced on optimism economic reports from the U.S. and Japan this week will suggest that growth in the world's two largest economies is gathering pace. Toyota Motor Corp. and Samsung Electronics Co. led gains. ``Economic reports are reflecting strength both in the U.S. and Japan and that's providing a very good investment environment,'' said Hitoshi Yamamoto, who manages about $1 billion in Japanese equities as the president at Commerz International Management (Japan) Ltd. ``We'll probably see companies revising earnings up in the coming quarters.'' The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks, advanced 1.4 percent to 90.01 at 1:52 p.m. in Tokyo. Japan's Nikkei 225 Stock Average jumped 2.2 percent to 11,631.23, while South Korea's Kospi index climbed 0.7 percent to 747.13.
Australia's S&P/ASX 200 Index advanced for a fourth day. Telstra Corp., the nation's largest telephone company, rose after the company said it expects to return A$4.5 billion ($3.1 billion) to shareholders. All stock benchmarks in Asia gained, except those in Hong Kong, Taiwan, India, Indonesia, Singapore and New Zealand. Toyota, which derives 80 percent of its operating profit from North America, advanced 2.3 percent to 4,380 yen. Samsung Electronics, South Korea's largest exporter, climbed 2.4 percent to 446,000 won. Australia's BHP Billiton, the world's third- biggest copper miner, added 1.1 percent to A$12.46.
`Driving the Market'
The MSCI Asia-Pacific index has climbed 12 percent since May 17, its lowest this year, on optimism the U.S. economy, the region's largest overseas market, will be able to weather the prospects of higher interest rates. ``We're going to see earnings growth backed by strong economic fundamentals driving the market,'' said Koichi Seki, an analyst at Chuo Securities Co. in Tokyo. ``Much of the rate hike concerns are priced in.' A U.S. Commerce Department report may show bookings for machinery, computers and other goods made to last three or more years rose 1.5 percent in May, the third gain in the last four months, according to a median forecast in a Bloomberg News survey.
Combined sales of new and existing homes probably reached a 7.625 million annual pace, the fourth highest ever, a separate survey showed. Japan's all industry index, a broad measure of economic activity, is expected to rise 1.9 percent in April from 1.1 percent in March, according to a median forecast of economists surveyed by Bloomberg. Separately, the tertiary index, a measure of demand for services, probably rose 1.6 percent in April, from 1 percent in March. The reports are due Thursday.
Australia, Taiwan
Australia's S&P/ASX 200 advanced 0.6 percent to 3549.50. Telstra surged 4.2 percent to A$5. The company expects to return about A$1.5 billion a year for the next three years as the company shifts its focus from acquisitions after the resignation of Chairman Bob Mansfield. ``They haven't been able to do anything better with their money, besides lose it,'' said George Raftopulos, who helps manage $610 million at Constellation Capital Management in Sydney. ``Investors will be relieved they've decided to give it back.'' Taiwan Semiconductor Manufacturing Co., the world's largest supplier of made-to-order chips, gained 1.6 percent to NT$43.50. United Microelectronics Corp., the second largest, advanced 1.3 percent to NT$23.20.
Morgan Stanley Capital International Inc. on Saturday said it will give full weight to Taiwan's stocks in global indexes. Investors may buy about $4 billion of the island's equities to track the benchmarks, analysts and investors said. Taiwan Semiconductor and United Microelectronics will attract most of that money, Alex Ypsilanti, Merrill Lynch & Co.'s Hong Kong-based head of Asia Pacific ex-Japan derivatives strategy, said last week. ///www.bloomberg.com