Asia: Stocks advance as Japanese shares climb amid weaker yen

[SINGAPORE] Most Asian stocks rose, with Japanese shares rallying as the yen weakened, after data showing expansion in US manufacturing boosted optimism over the health of the world's largest economy.

The MSCI Asia Pacific Index added 0.1 per cent to 140.74 as of 9:16am in Tokyo. Japan's Topix index rose 0.6 per cent as the yen dropped for a sixth day against the US dollar, declining 0.4 per cent to 102.03. The odds the Fed will raise rates in December climbed to 61 per cent on Monday, from 51 per cent a week earlier, as new orders and production expanded last month, indicating gradual improvement across America's manufacturing landscape.

"The data is suggesting the Fed will likely raise rates in December," Michael McCarthy, chief market strategist at CMC Markets, said by phone from Sydney.

"We'll probably have a couple of months of stronger data gauging from the strength of new orders. The yen weakness is supportive of Japanese exports."

South Korea's Kospi index added 0.4 per cent, while Australia's S&P/ASX 200 Index fell 0.4 per cent and New Zealand's S&P/NZX 50 Index slipped 0.3 per cent.

Markets in mainland China are closed all week for holidays, while those in Hong Kong have yet to start trading.

Futures on the Hang Seng Index slipped 0.1 per cent in their most recent trading. Hong Kong's benchmark equity gauge rose 1.2 per cent on Monday as better-than-expected Macau gambling numbers lifted casino operators.

Futures on the S&P 500 Index rose 0.1 per cent after the US equity benchmark gauge fell 0.3 per cent on Monday. Traders are keeping a close watch on US economic reports this week, scouring data for clues as to the timing of a potential Fed rate increase.

A key jobs report on Friday could show a pickup in the pace of hiring, according to economists surveyed by Bloomberg.

Oil halted four days of gains, holding near the highest close in three months, before data forecast to show US crude stockpiles expanded. West Texas Intermediate futures slipped 0.3 per cent in early Asian trading.

BLOOMBERG