TOKYO, July 2 (agencies): Asian stocks posted the best week in more than two years on speculation companies and consumers can withstand rising interest rates in the US, the world's biggest economy. Toyota Motor Corp. and Samsung Electronics Co. advanced.
The Federal Reserve on June 29 said US economic growth is slowing, raising expectations it will end a two-year policy of increasing interest rates. The central bank lifted borrowing costs for a 17th straight time.
``The Fed won't kill the global economy, which is what the market had feared,'' said Hans Kunnen, who helps oversee $70 billion at Colonial First State in Sydney. ``The outlook for growth remains in place and history suggests that when the Fed stops tightening, shares everywhere go for a run.''
The Morgan Stanley Capital International Asia-Pacific Index added 4.7 per cent to 126.87, the most since the week through March 19, 2004.
The measure fell 3.1 per cent in the past three months, the first quarterly drop in four, amid concern borrowing costs worldwide will keep rising. The index has lost 11 per cent since closing at a record on May 8.
Commodities producers such as BHP Billiton rose this week after raw-materials prices advanced. Mitsubishi UFJ Financial Group Inc. climbed on a newspaper report the lender is in talks that would allow it to expand into investment banking in the US
Japan's Nikkei 225 Stock Average climbed 2.5 per cent, the best week in almost three months. South Korea's Kospi index posted a weekly gain of 5.4 per cent, the most since November. Taiwan's Taiex index rose 3.9 per cent even as the island's central bank raised its benchmark interest rate.
Government reports this week fueled investors' expectations for economic growth in Asia. Japan's jobless rate fell in May, while consumer prices rose at the fastest pace in eight years. South Korea's industrial production last month grew at the quickest pace in four months.
``Since we don't see a significant slump in global or Asian growth, we don't see this as the start of an extended bear market in Asian shares,'' said Shane Oliver, who helps manage $64 billion at AMP Capital Investors in Sydney.
Toyota, the world's biggest automaker by market value, gained 3.5 per cent in the week. The company gets as much as 70 per cent of operating profit from North America, according to Credit Suisse Group.