By Darren Boey and Shani Raja March 17 (Bloomberg) -- Asian stocks rose, driving the MSCI Asia Pacific Index to an eight-week high, and copper gained as a Federal Reserve pledge to keep interest rates low and higher sales at South Korean department stores boosted confidence in the economic recovery. The MSCI Asia Pacific Index climbed 1 percent to 124.15 at 12:40 p.m. in Tokyo, set to close at the highest level since Jan. 21. Copper for three-month delivery in London increased 1.1 percent to $7,485 a metric ton, extending a 1.4 percent gain yesterday. Oil futures in New York advanced 0.4 percent to $81.99 a barrel, after rising 2.4 percent yesterday. A recovery in the global economy, driven by lower borrowing costs and government spending programs, is boosting investor optimism for a rise in corporate profits. The average estimate for annual earnings of companies in the MSCI Asia Pacific Index has risen 3.1 percent in the past four weeks, according to data compiled by Bloomberg. “It’s clear that the Fed is going to keep rates very accommodative to stimulate the growth recovery,” said Chris Hall, who helps manage $3.3 billion at Argo Investments in Adelaide, Australia. “The $1 million question is the consumer’s ability to step up to the plate to support the economy.” Advancing shares outnumbered those that declined on the MSCI Asia Pacific Index by seven to one. South Korea’s Kospi Index and Taiwan’s Taiex climbed 1.1 percent. Hong Kong’s Hang Seng Index gained 0.8 percent. Korean Retailers Lotte Shopping Co., South Korea’s biggest department-store owner, climbed 0.5 percent, and Hyundai Department Store Co. increased 1.5 percent as spending at the three biggest chains jumped 15.2 percent from a year earlier after a 4.8 percent advance in January, government data showed. Korea Life Insurance Co., the nation’s second-largest insurer, surged 7.8 percent on its first day of trading in Seoul after completing the country’s biggest initial public offering in four years. DeNA Co., a Japanese operator of shopping Web sites, soared 8.7 percent to 686,000 yen, the biggest gain in the MSCI Asia Pacific Index. The company boosted its annual net-income projection by 24 percent. Mazda Motor Corp., which generates 77 percent of its revenue outside of Japan, climbed 3.4 percent to 247 yen after the yen depreciated to 124.56 per euro today from 123.38 at yesterday’s close of stock trading in Tokyo. A weaker yen boosts the value of overseas income when converted into the home currency. Nikon Corp. a camera maker that gets 25 percent of its sales in Europe, climbed 1.5 percent to 2,200 yen. Weaker Yen The yen depreciated against the euro after Standard & Poor’s affirmed Greece’s investment-grade BBB+ rating and dropped the country from “creditwatch negative,” saying the 4.8 billion euros ($6.6 billion) of budget cuts passed this month “were appropriate to achieve” the goal of reducing the European Union’s biggest deficit. Material producers advanced on gains in commodity prices. BHP Billiton Ltd., the world’s biggest mining company, rose 0.7 percent to A$43.05 in Sydney, and Rio Tinto Group, the No. 3 mining company, advanced 0.9 percent to A$76.18. Nippon Mining Holdings Inc. climbed 3 percent to 451 yen in Tokyo. Crude oil rose for a second day to trade near $82 a barrel in New York as OPEC ministers indicated they would refrain from increasing output at a meeting of the producer group today. Oil prices are in the right range, said Ali al-Naimi, oil minister for Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries. OPEC Production “The broad consensus is that OPEC will leave production rates unchanged, and I can’t see any reason why they wouldn’t,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. The New Zealand dollar rose to a six-week high against the U.S. currency as the Federal Reserve’s pledge spurred demand for riskier assets. Canada’s dollar was near the highest in almost two years as higher oil prices boosted the value of the nation’s biggest export. New Zealand’s dollar gained 0.3 percent to 71.20 U.S. cents in Tokyo, and touched 71.34 cents, the most since Feb. 3. The Canadian currency traded at C$1.0140 to the greenback, after reaching C$1.0136 yesterday, the strongest since July 2008. The dollar traded at $1.3769 against the European currency after slumping 0.6 percent yesterday. “We had the FOMC reaction, which was U.S. dollar negative across the board,” said Ray Attrill, global research director at Forecast Ltd. in Sydney. “The gold price and oil price both came back very sharply in trade. I think they helped commodity currencies.” Rate Forecasts CME Group Inc. exchange futures showed a 26 percent chance policy makers will increase the fed funds target by at least a quarter-percentage point by the September meeting, down from 45 percent odds before the Federal Open Market Committee statement. Benchmark rates are 4 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S. The Bank of Japan today wraps up a two-day policy meeting and will likely expand a 10 trillion yen ($111 billion) credit program, according to 12 of 17 economists surveyed by Bloomberg. “The major central banks look like they will continue to be committed to keeping policy stimulus in pace,” said Mitul Kotecha, head of global foreign-exchange strategy for Credit Agricole CIB in Hong Kong. “If the Bank of Japan does act today, it may play negatively for the yen.” Malaysia’s ringgit climbed 0.3 percent to 3.307 per dollar. South Korea’s won gained 0.2 percent to 1,130.55 per dollar to near a two-month high on the department store sales report. Korean Bonds South Korean bonds climbed, pushing the yield on the benchmark three-year bond down 9.5 basis points to 3.78 percent on speculation the government’s new pick for central bank leader may keep interest rates on hold. Kim Choong-soo was named by President Lee Myung Bak yesterday to succeed Governor Lee Seong Tae when his term ends March 31. The cost of protecting bonds from default decreased in Asia, approaching the lowest since January. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 1.5 basis points to 91 basis points as of 8:51 a.m. in Singapore, Citigroup Inc. prices show. A drop in the index shows improving perceptions of creditworthiness, as measured by credit-default swaps. A rise shows the opposite. To contact the reporters for this story: Darren Boey at dboey@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

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