By Clyde Russell and Wes Goodman April 29 (Bloomberg) -- Asian currencies and metals gained and the cost to insure against bond losses declined as the Federal Reserve pledged to keep U.S. interest rates low. the yen advanced as concern Europe’s deficit crisis is widening damped demand for higher-yielding currencies. South Korea’s won rose 0.3 percent to 1,115.20 per dollar and the Malaysian ringgit advanced 0.5 percent. About 15 stocks rose fell for every 14 that fell on the MSCI Asia Pacific excluding Japan Index, which was little changed at 423.73 at 2 p.m. Hong Kong time. Standard & Poor’s 500 Index futures were 0.2 percent lower. Copper advanced 0.9 percent. The International Monetary Fund said in a report today that Asia’s economy will expand 7.1 percent this year and next on demand for manufactured goods and commodities. Fed policy makers restated their intention to keep interest rates near zero for an extended period, and European leaders met to stop Greece’s debt crisis from infecting the rest of the region. “We expect China and the other countries in emerging Asia to continue to outpace growth in the overall global economy,” fund managers including Tomoya Masanao at Pacific Investment Management Co. wrote in a report. Pimco, which runs the largest mutual fund, recommended the currencies of China, South Korea and Singapore. Japan’s currency rose against 12 of its 16 major counterparts after a credit downgrade of Spain yesterday prompted Germany to call for faster efforts to rescue Greece, whose rating was reduced to junk this week. New Zealand’s dollar fell as central bank Governor Alan Bollard indicated he may raise interest rates at a slower pace than in previous cycles. Kiwi Slumps The yen traded at 93.96 per dollar in London from 94.03 in New York yesterday. It reached 94.36 on April 26, the lowest level since April 6. Japan’s currency was at 124.37 against the euro from 124.32. The dollar fetched $1.3236 per euro from $1.3221, and climbed to $1.5166 versus the pound from $1.5209. New Zealand’s dollar weakened the most of the major currencies, sliding 0.5 percent to 71.71 U.S. cents and losing 0.6 percent to 67.37 yen. “Lingering fears of a further deterioration in the European sovereign debt crisis may weigh on risk sentiment,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Against this backdrop, ‘safe-haven’ currencies such as the dollar and the yen may extend their recent gains.” The won strengthened after a Bank of Korea survey showed manufacturers are the most upbeat they’ve been in seven years. The central bank said an index measuring expectations for the month ahead climbed to 107, the highest level since 2002. Merkel Pledge The cost of protecting Asian and Australian bonds from default declined after German Chancellor Angela Merkel pledged to step up efforts to overcome the Greek fiscal crisis, saying in Berlin yesterday that it’s “clear negotiations between the Greek government, the European Commission and the IMF need to be sped up.” The Markit iTraxx Australia index of credit-default swaps dropped 8 basis points to 90.5 basis points in Sydney, the risk benchmark’s biggest decline since Nov. 30, according to Westpac Banking Corp. The Markit iTraxx Asia index of 50 investment- grade borrowers outside Japan fell 6 basis points to 104.5, Royal Bank of Scotland Group Plc prices show. Japan’s markets are closed for a holiday. China’s Shanghai Composite Index gained 0.4 percent. South Korea’s Kospi index sank 0.3 percent and Australia’s S&P/ASX 200 Index dropped 0.8 percent. Suning Appliance Co., China’s biggest electronics retailer by market value, climbed 2.6 percent to 11.27 yuan in Shenzhen, south China, after saying first-quarter profit increased 86 percent from a year earlier. ANZ Shares Drop China Merchants Bank Co. gained 1.7 percent to 14.05 yuan in Shanghai after first-quarter profit rose 40 percent. Australia & New Zealand Banking Group Ltd. sank 2.6 percent to A$24.21 in Sydney as its chief executive officer voiced concern over Europe’s debt. Separately, ANZ Bank said fiscal first-half profit jumped 36 percent as lending income grew and charges for bad loans fell. Smith confirmed ANZ is considering buying a 51 percent stake in Korea Exchange Bank. “Concern surrounding European sovereign debt is limiting gains,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “Investors are grappling with the sustainability of improved earnings and the impact on long-term stock valuations.” Copper for three-month delivery in London traded 0.9 percent higher at $7,465 a ton on the Fed’s rate pledge. The futures climbed for the first time in three days. Jobs Improving “The labor market is beginning to improve,” the Federal Open Market Committee said in a statement yesterday in Washington, after last month saying it was “stabilizing.” Officials also said growth in household spending has “picked up recently.” “Brighter economic growth prospects and widening interest rate differentials with advanced economies are likely to attract more capital” to Asia, the IMF said in its report. “Policy makers will need to be attentive to safeguarding the macro economy and financial system against the build-up of imbalances in local asset and housing markets.” Corn gained 0.5 percent to $3.65 a bushel, rising for a second day, after China bought more than 100,000 metric tons from U.S. exporters for the first time since 2001. Crude oil traded above $83 a barrel in New York after gaining 1 percent yesterday after a government report showed U.S. refineries operating at the highest level in almost two years, bolstering optimism fuel demand will recover in the world’s largest user. To contact the reporters for this story: Clyde Russell in Beijing at crussell7@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net.

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