By Yumi Teso and Anna Kitanaka June 18 (Bloomberg) -- Asian stocks gained, driving the MSCI Asia Pacific Index to its longest winning streak in 11 months, and the won climbed on signs investors are buying assets in the region as an economic recovery gathers pace. The MSCI Asia Pacific Index rose 0.3 percent to 116.02 as of 3:09 p.m. in Tokyo, advancing for a seventh day. South Korea’s won had its biggest weekly jump in 13 months after Finance Minister Yoon Jeung Hyun said growth will likely exceed 5 percent this year. The euro strengthened to a three-week high against the dollar and Euro Stoxx 50 futures rose 0.4 percent as concerns eased that Europe’s debt crisis will worsen. Emerging-market equity and bond funds received net inflows in the week to June 16 as appetite for higher-yielding assets revived after concerns over European deficits eased, EPFR Global said. A government report showed Thai exports jumped 42 percent in May from a year earlier, the most in almost two years, and Japan’s government pledged to cut company tax to spur growth. “There has been optimism that the impact of Europe’s problem on the Asian economy may be limited, supporting the purchase of regional currencies,” said Minori Uchida, a senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. The MSCI Emerging Markets Index rose 0.5 percent, extending an eight-day, 6.8 percent rally. The FTSE Bursa Malaysia KLCI Index added 0.4 percent. The Hang Seng China Enterprises Index, a measure of Chinese shares traded in Hong Kong, rallied 0.9 percent, set for a seventh day of gains that will be its longest winning streak since April, 2007. Currencies Gain South Korea’s won advanced 0.9 percent to 1,202.65 per dollar as foreigners pumped money into the stock market for a sixth day, the longest run of net purchases in two months. The Taiwan dollar gained 0.5 percent to NT$32.16 before a report next week that a Bloomberg survey of economists indicates will show exports increased 34 percent in May from a year earlier. Emerging equities funds took in $2.5 billion in the past week, the second-largest inflow this year, while emerging bond funds received $659 million, EPFR said in a statement. The MSCI Asia Pacific Index has slumped 10 percent from its high this year on April 15 as swelling budget deficits prompted Standard & Poor’s to cut ratings of Greece, Spain and Portugal. The retreat has driven down the average price of shares in the gauge to 14.7 times estimated earnings. The ratio sank to 13.8 times on May 18, the lowest level since December 2008. “There was a lot of pessimism about what’s happening in Europe that took the market down,” said Tim Leung, who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong. “Stabilization in the European funding probably made a lot of investors less worried about the situation.” Default Risk HSBC Holdings Plc, Europe’s biggest bank, gained 0.9 percent in Hong Kong after Spain yesterday sold 3.5 billion euros ($4.3 billion) of bonds at yields lower than the prevailing market rates. London-based Standard Chartered Plc jumped 3.7 percent. The cost of protecting Japanese corporate bonds from non- payment declined, according to traders of credit-default swaps. The Markit iTraxx Japan index dropped 3 basis points to 130, according to Morgan Stanley. The euro advanced to $1.2395, after earlier touching $1.2414, the highest level since May 28. The yen climbed 0.2 percent to 90.87 after the government pledged in its medium-term economic plan today to bring the corporate tax rate down to a level “commensurate” with other leading nations. Asian technology shares gained after Apple Inc. rallied 1.7 percent to a record yesterday. Morgan Stanley said the customer base for the iPhone may top 100 million users next year on demand for its latest version. Apple Link Softbank Corp., the exclusive supplier of the iPhone in Japan, climbed 2.7 percent. Nintendo Co., the world’s largest maker of video-game players, advanced 2 percent, its seventh consecutive gain. Wintek Corp., a component maker for Apple Inc.’s iPad and iPhones, gained 2 percent. Japan’s Nikkei 225 Stock Average was little changed and futures on the Standard & Poor’s 500 Index fell 0.1 percent today. Toyota Motor Corp., which gets 28 percent of its sales in North America, lost 1.7 percent in Tokyo after U.S. jobless claims increased. “The economic climate has to further improve in countries like the U.S. for the stock market to enter a full-fledged recovery phase, though investors are less anxious about Europe,” said Kazuhiro Takahashi, a general manager at Tokyo- based Daiwa Securities Capital Markets Co. Bullish on Gold Gold may advance to a record as investors take refuge in the precious metal to protect their wealth from Europe’s financial turbulence. Bullion for immediate delivery traded at $1,245.02, after jumping as much as 1.8 percent yesterday. The metal touched a record $1,252.11 on June 8. Newcrest Mining Ltd., Australia’s largest gold producer, gained 2.1 percent in Sydney. “We are still very bullish on gold,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. “Gold will remain the main beneficiary of what’s happening in Europe unless the picture takes a turn for the better.” Crude oil fell for a second day in New York, dropping 0.6 percent to $76.37 a barrel, amid doubts about the pace of the economic recovery in the U.S., the world’s largest energy consumer. U.S. fuel consumption fell 0.9 percent to the lowest level in five weeks in the seven days ended June 11, the Energy Department reported June 16. “The U.S. economy is facing a major structural adjustment in the wake of the financial crisis and subsequent economic slump,” said Toby Hassall, a research analyst at CWA Global Markets Ltd. --Kim Kyoungwha and Christian Schmollinger in Singapore, Yusuke Miyazawa in Tokyo, Weiyi Lim in Taipei, Ronnie Koo in Hong Kong and Toshiro Hasegawa in Tokyo. Editors: Sandy Hendry, Patrick Chu To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net.

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