Asian stocks advanced for a second day and default risk dropped after Greek Prime Minister George Papandreou won a confidence vote in parliament. The euro weakened from a one-week high against the dollar. The MSCI Asia Pacific Index added 1 percent as of 3:05 p.m. in Tokyo, extending yesterday’s 1.4 percent rally. Standard & Poor’s 500 Index futures lost 0.2 percent, while those on the Europe Stoxx 50 Index were little changed. The Markit iTraxx Australia index dropped the most in three months. Europe’s shared currency fell 0.1 percent to $1.4396 after appreciating to $1.4434, while South Korea’s won and Taiwan’s dollar rose. Oil fell 0.6 percent in New York, while corn and wheat advanced. While Papandreou won a vote of confidence from 155 out of 300 lawmakers, he needs parliamentary approval next week for a 78 billion-euro ($112 billion) package of budget cuts to stave off default. Asian shares are extending a rebound from a three- month low before a statement from the Federal Reserve that may help investors assess the outlook for interest rates and the U.S. central bank’s record stimulus efforts. “Investors seem to be betting that Greece will move one step closer to securing further international financial aid, but the process would be far from smooth as strong protests by citizens against austerity measures will follow,” Lim Chang Gue, a fund manager in Seoul at Samsung Asset Management Co., which oversees about $30 billion. “The stock-market gain appears to be only a technical bounce and I’m not too optimistic for now.” Asia’s Rally Almost three shares gained for every one that fell on MSCI’s Asia Pacific Index. The measure has added 1.8 percent since completing a seventh weekly loss on June 17, the longest slump since 2004. Japan’s Nikkei 225 Stock Average jumped 1.7 percent and Australia’s S&P/ASX 200 Index rallied 0.8 percent. South Korea’s Kospi Index increased 0.8 percent and Taiwan’s Taiex index rose 0.3 percent even after MSCI Inc. left the two as emerging markets following a review. The index compiler also delayed a decision until December on whether to raise the United Arab Emirates and Qatar to emerging-market status from its frontier classification. Paladin Energy Ltd. (PDN) jumped 5.7 percent in Sydney after Citigroup Inc. raised its rating on the Australian uranium producer to “buy” from “hold.” BHP Billiton Ltd. (BHP) rose 1.3 percent, leading mining companies higher, following a gain in metal prices yesterday. The won strengthened 0.5 percent to 1,073.90 per dollar, bound for a fourth day of gains. Taiwan’s dollar increased 0.3 percent to NT$28.874 versus the U.S. currency. Data today may show the island’s jobless rate dropped to 4.3 percent in May, the least since September 2008, according to the median forecast in a Bloomberg survey. ‘Holding Up Well’ “The Asian currencies are benefitting from the risk-on mode you see in the stock market and also benefitting from the belief that the outlook in Asia is generally holding up well,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. “Ultimately, the issue is what needs to be done with the Greek debt situation in terms of a final solution, because the bailout loan itself is more of a stop-gap measure.” The euro weakened against 10 of its 16 most-actively traded counterparts. After the vote, police used tear gas to disperse crowds protesting Papandreou’s budget cuts. The premier will now meet his counterparts at a summit in Brussels starting tomorrow that will discuss a new financing package to shield Greece from record borrowing costs for as many as three years. European finance ministers said this week that they would hold off a 12 billion-euro payment promised for July until plans to cut the deficit, sell state assets and impose a levy on wages are passed. Buying Time “This vote buys Papandreou a week,” said Daniel Genter, who oversees about $3.8 billion as president of Los Angeles- based RNC Genter Capital Management. “But they’ve got to pass an austerity package within the next 30 days. There’s just not enough confidence right now that they’re going to get it through.” The Dollar Index rose 0.1 percent, while Treasuries were little changed after a three-day drop, with 10-year notes yielding 2.98 percent. Chairman Ben S. Bernanke will probably delay the Fed’s exit from record stimulus, economists said in a Bloomberg News survey conducted last week, giving the flagging economy a boost without resorting to additional asset purchases. Bernanke and his fellow policy makers have given no indication they’ll tighten policy anytime soon. With manufacturing slowing and unemployment increasing during May to 9.1 percent, the Fed chief said this month growth is “frustratingly slow.” The S&P 500 jumped 1.3 percent yesterday, while the Stoxx Europe 600 Index surged 1.4 percent. Both gauges posted their biggest advances since April 20. Default Risk The Markit iTraxx Australia index sank 3.5 basis points to 113.5 basis points, on track for its biggest fall since March 18, according to Westpac Banking Corp. and data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 2.5 basis points, while the gauge for Japan lost three basis points. Oil for August delivery slid 0.6 percent to $93.59 a barrel on the New York Mercantile Exchange, snapping a two-day, 0.8 percent rally. The International Energy Agency said Saudi Arabian oil production may be rising and JPMorgan Chase & Co. said output by the United Arab Emirates and Kuwait is increasing. Corn for December delivery advanced as much as 0.7 percent to $6.85 a bushel before trading at $6.0875, bound for a fourth day of gains. Wheat futures climbed 0.4 percent to $7.085, extending yesterday’s 1.4 percent rally. Group of 20 farm ministers are meeting in Paris today, with French Agriculture Minister Bruno Le Maire saying that world leaders risk making this “the century of hunger” unless they can agree to new rules on food supply. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net. To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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