By Darren Boey and Shani Raja March 17 (Bloomberg) -- Asian stocks advanced, driving the MSCI Asia Pacific Index to a two-month high, as the U.S. Federal Reserve pledged to keep interest rates low and the Bank of Japan expanded a lending program. Commodities rose and the yen fell. The MSCI Asia Pacific Index climbed 1.5 percent to 124.83 at 5 p.m. in Tokyo. Copper for three-month delivery in London increased 1.6 percent to $7,521.25 a metric ton, after a 1.4 percent gain yesterday. The yen fell against 15 of 16 most- traded counterparts, to 124.88 per euro in Tokyo from 124.31 yesterday in New York. Futures on the Standard & Poor’s 500 Index advanced 0.2 percent, following a 0.8 percent gain in the gauge yesterday. The Stoxx Euro 600 rose 0.4 percent to 260.13. A recovery in the global economy, driven by lower borrowing costs and government spending, is boosting investor optimism for an increase 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. “Steps like these are helping grease the wheels of the recovery,” said Chris Hall, who helps manage about $3.3 billion at Argo Investments in Adelaide, Australia. “It’s clear the Fed is going to keep rates very accommodative to stimulate the growth recovery. Japan’s way is to try and make credit easier to get. The fact that they’ve been flexible and announced these initiatives shows they’re trying to deal with the problems.” Advancing shares outnumbered those that declined on MSCI’s Asian index by eight to one. South Korea’s Kospi Index jumped 2.1 percent, the most since Sept. 10, and erased its loss this year. Taiwan’s Taiex climbed 2 percent and Hong Kong’s Hang Seng Index gained 1.8 percent. Intel Product The Nikkei 225 Stock Average increased 1.2 percent in Japan, where the central bank today doubled its three-month loan facility to 20 trillion yen ($222 billion). DeNA Co., a Japanese operator of shopping Web sites, soared 11 percent to 698,000 yen, the biggest gain in the MSCI Asia Pacific Index, after the company boosted its annual net-income projection by 24 percent. Technology shares advanced after Intel Corp.’s release of a new product stoked optimism demand for chips is improving. Intel, the world’s largest semiconductor maker, officially started selling a new line of server chips yesterday. Samsung Electronics Co., the largest memory-chip maker globally, advanced 4.3 percent to 798,000 won in Seoul. Hynix Semiconductor Inc. climbed 2.3 percent to 24,150 won. Elpida Memory Inc., Japan’s No. 1 maker of computer-memory chips, gained 1.6 percent to 1,776 yen after the Nikkei newspaper said the company may swing to an operating profit from a loss in the year to March 31. Biggest IPO Korea Life Insurance Co., the nation’s second-largest insurer, surged 7.9 percent to 8,850 won on its first day of trading in Seoul after completing the country’s biggest initial public offering in four years. Mining companies advanced on higher commodity prices, led by BHP Billiton Ltd.’s 1.3 percent gain to A$43.30 in Sydney. Nippon Mining Holdings Inc. rose 3.7 percent to 454 yen in Tokyo. Crude oil gained 0.6 percent to $82.19 a barrel as OPEC ministers indicated they would refrain from increasing output and Ali al-Naimi, oil minister for Saudi Arabia, said prices are in the right range. Saudi Arabia is the largest producer in the Organization of Petroleum Exporting Countries. “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. Rupiah Climbs In Jakarta, PT International Nickel Indonesia gained 3.8 percent to 4,075 rupiah after nickel futures advanced 1.6 percent on the London Metal Exchange, a second-straight gain. The Jakarta Composite index gained 2.6 percent, on course for its highest close since Feb 28, 2008. PT Astra International, the country’s biggest auto retailer, rose 3.6 percent to 40,050 rupiah as the nation’s currency climbed to a 19-month high, reducing the cost of importing cars and spare parts. The rupiah gained 0.7 percent to 9,109 per dollar, while South Korea’s won rose 0.4 percent to 1,128.4 versus the U.S. currency as the outlook for low U.S. interest rates boosted the appeal of higher-yielding assets. The benchmark interest rate in Indonesia is 6.5 percent and 2 percent in South Korea. The yen slipped to 90.55 yen per dollar from 90.31. The euro gained to $1.3783 from $1.3766. The Canadian currency traded at C$1.0138 per U.S. dollar from C$1.0141, and earlier reached C$1.0132, the strongest since July 2008 as prices for oil, the nation’s biggest export, gained. Risk Appetite “Expectations for low interest rates in the U.S. and Japan are fueling risk appetite,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “The bias is to sell the yen and the dollar and to buy commodity- linked currencies.” The U.S. dollar fell a second day before a report that may show wholesale prices declined for the first time in five months, backing the Fed’s decision yesterday to keep the federal funds rate target for overnight loans between banks in a range of zero to 0.25 percent. Prices paid to U.S. factories, farmers and other producers are projected to fall 0.2 percent in January, according to the median estimate of 70 economists surveyed by Bloomberg News. Excluding fuel and energy, prices may have climbed 0.1 percent after rising 0.3 percent in January. 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, 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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