Asian stocks rose to a 17-month high after China's exports grew more than estimated and investors speculated Japan will expand stimulus.

Commodities advanced, while the yen neared a 2.5-year low against the dollar. The MSCI Asia Pacific Index climbed 0.8 per cent at 2:39 p.m. in Tokyo. Futures on the Standard and Poor's 500 Index added 0.3 per cent. The Nikkei 225 Stock Average gained 0.8 per cent as the yen weakened against all its major peers. The euro retreated 0.2 per cent versus the greenback before the European Central Bank meets to review borrowing costs today.

Crude advanced 0.4 per cent in New York and aluminium rose for a fourth day. Yuan forwards strengthened the most in a year. China's overseas sales rose 14.1 per cent in December from a year earlier, almost triple the 5 per cent gain predicted in a Bloomberg analyst survey. Bank of Japan Governor Masaaki Shirakawa said yesterday the central bank was in close co-operation with the government, spurring speculation policy makers will boost asset purchases when they meet January 21-22. The ECB will probably keep its main refinancing rate at a record-low 0.75 per cent, according to a Bloomberg survey. "The Chinese data is a whole lot better than anyone expected," said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. "That will only add to recent investor optimism that the Chinese rebound has got legs."

More than two stocks rose for each that fell on MSCI's Asian gauge, with technology and financial companies leading the advance. Hong Kong's Hang Seng Index climbed 0.9 per cent to its highest level since June 2011, while the Shanghai Composite Index added 0.5 percent. The Philippine Stock Exchange Index lost 1 per cent, retreating from a record.

Aluminium Corp. of China Ltd. Jumped 8.9 per cent in Hong Kong, heading for its biggest advance since October 2011. Mazda Motor Corp. rallied 10 per cent, leading gains among Japanese automakers, after Bank of America raised its rating on the stock to buy. Korea Electric Power, which supplies all of South Korea's electricity, rose 3.8 per cent in Seoul trading after increasing power tariffs.

Bloomberg