Mitsubishi UFJ Financial Group, Japan's largest bank by market value, gained 1.2 per cent as Federal Reserve policy makers signaled interest rates will remain at a record low. Rio Tinto Group, the world's third largest mining company, climbed 1.6 per cent in Sydney as metal prices advanced. Honda, Japan's second-biggest carmaker, jumped 2.3 per cent after Goldman Sachs Group recommended buying the stock.

“Excess liquidity supported by low interest rates should be an encouraging factor for the stock market,” said Mitsushige Akino, who oversees the equivalent of $US450 million in assets in Tokyo at Ichiyoshi Investment Management.

The MSCI Asia Pacific Index rose 0.4 per cent in Tokyo, extending its five-day increase to 4 per cent. The gauge has surged 69 per cent from a more than five- year low on March 9 on signs stimulus policies around the world are helping to revive the global economy.

Japan's Nikkei 225 Stock Average gained 0.6 per cent to 9,923.73 in Tokyo. New Zealand's NZX 50 Index rose 0.4 per cent. Australia's S&P/ASX 200 Index added 0.3 per cent as the government reported an unexpected increase in jobs last month.

The Kospi Index climbed 0.8 per cent in South Korea, where the nation's central bank is expected to leave its benchmark interest rate unchanged following a meeting today.

Policy makers

Futures on the Standard & Poor's 500 Index added 0.1 per cent. The measures advanced 0.5 per cent to a 13-month high in New York yesterday, as China's industrial production surged and after comments by Fed policy makers.

Federal Reserve Bank of Dallas President Richard Fisher said on November 10 that economic growth and inflation may persist below ideal levels into 2011, making the central bank's current interest-rate stance “appropriate.”

San Francisco Fed Bank President Janet Yellen raised the prospect of a “jobless recovery” in a speech in Phoenix, while Dennis Lockhart, who heads the Atlanta Fed, predicted a “relatively subdued pace of growth” this quarter and beyond.

Mitsubishi UFJ gained 1.2 per cent to 516 yen. National Australia Bank, the country's biggest lender to businesses, added 1.1 per cent to $30.60.

Rio Tinto gained 1.6 per cent to $69.72. Mitsui, which gets 30 per cent of sales from commodities, climbed 2.2 per cent to 1205 yen in Tokyo.

Record gold price

Gold added 0.4 per cent in New York to $US1119.50 an ounce today, after surging earlier to a record $1120.90. It was the ninth day of gains for the precious metal's futures. The London Metals Index, a measure of six metals including copper and zinc, added 0.2 per cent yesterday.

The MSCI Asia Pacific Index's rally since March has driven the average price of stocks in the gauge to 22 times estimated profit, compared with 17 times for the S&P 500 and 15 times for the Dow Jones Stoxx 600 Index.

Honda climbed 2.3 per cent to 2920 yen as Goldman added the stock to its “conviction buy” list. The company said yesterday it is developing a small car for India, which prefers compact cars.

FamilyMart, a Japanese convenience-store operator, advanced 4.4 per cent to 2595 yen. The Nikkei newspaper said the company and its top shareholder, Itochu Corp, plan to purchase Am/pm Japan Co, a competitor, for about 10 billion yen ($US111 million).

(source from theage.com.au --business day)