Asian stocks rose to a record, with the Nikkei 225 Stock Average surpassing 18,000 for the first time in six years after the governor of the Bank of Japan said interest rates would stay low.
Mitsubishi Estate Co led gains by property developers on expectations borrowing costs would be kept in check. Seven & I Holdings Co, Japan's largest retailer, gained on speculation low rates would encourage spending.
"Most investors do not expect the central bank to raise rates before summer," said Haruo Otsuka, who oversees US$870 million at Toyota Asset Management Co in Tokyo. "At that pace, the negative impact to earnings of large property developers will be almost zero."
Japan's Nomura Holdings Inc led brokerages higher on speculation low interest rates would fuel market gains and lead to increased trading volume and higher commissions. Samsung Securities Co rose as South Korea's Kospi advanced to a record.
The Morgan Stanley Capital International Asia-Pacific Index added 0.7 percent to 147.51 as of 4:12pm in Tokyo. Japan's Nikkei 225 Stock Average climbed 1.1 percent to 18,108.79, closing above 18,000 for the first time since May 8, 2000.
China Mobile Ltd led gains in Hong Kong, where the Hang Seng Index was set for its longest winning streak in three months.
Tattersall's Ltd and Oxiana Ltd paced Australia's S&P/ASX 200 Index to its first close above 6,000 after posting profit increases that beat analyst forecasts.
Benchmarks climbed around the region, except in Malaysia, the Philippines and New Zealand. Markets are closed in China and Taiwan for the Lunar New Year.
The Bank of Japan raised its benchmark interest rate to 0.5 percent on Wednesday from 0.25 percent.
"For the time being, we will maintain an accommodative monetary environment by holding interest rates as low as possible to support economic growth," central bank Governor Toshihiko Fukui said in parliament yesterday.
South Korea's Kospi index rose 1 percent to a record yesterday. Samsung Securities, the biggest South Korean brokerage by value, jumped 5.3 percent to 54,100 won (US$57.43). Daewoo Securities Co, the second largest, rose 2.2 percent to 18,900 won.
"The market's at a record high, which makes investors expect more people will buy stocks," said Cho Min-keon, who manages about US$370 million at Kyobo Investment Management Co in Seoul. "Brokerages get more than half of their sales from trading fees, so it's good for them if the value of transactions goes up."
Japan's currency touched an all-time low of 159.13 against the euro in Tokyo and weakened to 121.19 per US dollar in New York on Wednesday, approaching the four-year low of 122.19 on Jan. 29.
"The fact that we could confirm that interest rate increases will not be consecutive eased concern over the currency trend and pushed exporter stocks higher," said Masayuki Kubota, who oversees US$2.1 billion in assets at Daiwa SB Investments Ltd in Tokyo.
The won weakened to as low as 940.55 to the US dollar in Seoul, its lowest since Jan. 31, from 938.50 on Wednesday, according to Seoul Money Brokerage Services Ltd.
Exporters also got a boost after Japan reported an unexpected trade surplus of ¥4.4 billion (US$36 million) for last month.
China Mobile, the world's largest mobile phone operator by users, added 2.6 percent to HK$79.10 (US$10.13). The company said it gained 4.86 million users last month, taking its total to 306.1 million.
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