Asian stocks advanced, lifting the regional index for the first time in three days, amid signs the U.S. economic recovery is strengthening. The euro traded near a two-month low against the dollar. The MSCI Asia Pacific Index added 0.4 percent to 130.82 as of 4 p.m. in Tokyo, halting a two-day, 1.6 percent drop. Futures on the Euro Stoxx 50 index were little changed while those on the Standard & Poor’s 500 Index slid 0.2 percent as U.S. markets closed for the Thanksgiving holiday today. The euro weakened to $1.3318 from $1.3335 in New York as European leaders struggled to contain surging bond yields in countries such as Portugal. Americans increased spending in October and filed fewer unemployment claims last week, boosting the outlook for holiday- season shopping that traditionally begins on the day after Thanksgiving, known as Black Friday. Optimism that the world’s largest economy was improving was tempered by speculation that Ireland’s bailout will fail to stem Europe’s sovereign debt crisis and China will step up efforts to tame inflation. The U.S. data “reduces the chance of a double dip quite considerably and strengthens a lot of assets,” Richard Lacaille, who oversees $1.9 trillion as chief investment officer at State Street Global Advisors, said in a Bloomberg Television interview in Hong Kong. “There’s a bit of evidence now coming out to say that maybe the economy has got some steam in it after all.” Three stocks rose for every two that declined on the MSCI Asia Pacific Index. Japan’s Nikkei 225 Stock Average climbed 0.5 percent, paced by exporters including Toyota Motor Corp. and Sony Corp. Raw material suppliers also advanced, with Jiangxi Copper Co. rising 2 percent in Hong Kong and Rio Tinto Group gaining 0.7 percent. Zinc, Oil Zinc for three-month delivery climbed as much as 1.7 percent to $2,157 a metric ton before trading at $2,120 a ton in London. The LME index of six industrial metals rose 1.4 percent yesterday, gaining for the first time in four days yesterday. Oil slipped 0.2 percent to $83.66 a barrel after jumping 3.2 percent yesterday to the highest settlement since Nov. 15. U.S. household purchases advanced 0.4 percent after a 0.3 percent gain in September that was larger than previously estimated, the Commerce Department reported yesterday. Figures from the Labor Department showed that jobless claims fell by 34,000 to 407,000 in the week ended Nov. 20, lower than the 435,000 projected by economists. Holiday Sales Retailers are projecting a better holiday shopping period and are increasing discounts to attract more consumers. The National Retail Federation has forecast November-December holiday sales will rise by 2.3 percent from a year ago, the most since 2006. Tiffany & Co., the second-biggest luxury jewelry retailer, rose 5.3 percent yesterday in New York after beating earnings forecasts, helping to end a two-day drop in the S&P 500. Data showing improvement in the U.S. economy sent Asian bond risk lower for a second day. The Markit iTraxx Asia credit- default swap index of 50 investment-grade borrowers outside Japan declined 4 basis points to 109, according to Royal Bank of Scotland Group Plc. iTraxx indexes for Australia and Japan dropped 3 basis points and 1.5 basis points, respectively, according to Westpac Banking Corp. and Morgan Stanley. Europe’s Woes The euro, which yesterday fell against the dollar to the lowest level since Sept. 22, weakened against most of its 16 major counterparts. Portuguese workers staged a strike yesterday before the government faces a final vote in parliament on Nov. 26 on its 2011 spending plan, which includes measures to trim the deficit. In Ireland, labor unions are planning “mass mobilization” to demonstrate against planned spending cuts, with a march in Dublin on Nov. 27. Bond yields have surged in Greece, Ireland, Portugal and Spain. The extra yield demanded by investors to hold Spanish 10- year bonds over German bunds rose to a record 249 basis points yesterday, while the Irish yield spread widened for a fourth day, climbing to 618 basis points. That’s close to a record 652 basis points set on Nov. 11. “The euro is a good sell at the moment,” said Anthony Gray, head of foreign-exchange dealing in Sydney at Travelex Global Business Payments, a currency-exchange network. “We’ve seen unrest in Ireland before, so that’s definitely possible and will weigh on Europe and will weigh on risk as a whole.” Japan’s yen traded near a two-month high against the euro while Australia’s dollar fell after China’s central bank said it will strengthen liquidity management and “normalize” monetary conditions, damping demand for higher-yielding currencies. Yen, Aussie The yen bought 111.20 per euro from 111.40 yesterday, when it rose to 110.32, the strongest since Sept. 15. The so-called Aussie fell to 97.89 U.S. cents from 98.17 cents in New York and traded at 81.71 yen from 82 yen yesterday. New Zealand’s dollar slid to 75.83 U.S. cents from 75.99 cents, after touching 75.59, the weakest since Oct. 29. The central bank’s comments helped the yuan gain for the first time in five days, appreciating 0.07 percent to 6.6495, according to the China Foreign Exchange Trade. The nation’s benchmark money-market rate also advanced to the highest level in more than a month, jumping 15 basis points to 2.48 percent, according to a daily fixing published at 11 a.m. by the National Interbank Funding Center in Shanghai. That was the highest level since Oct. 8. To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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