Feb. 25 (Bloomberg) -- Asian stocks rallied from a five- year low, as declines in the yen boosted Japanese automakers and assurances that the U.S. will shore up banks drove financial companies higher.

Toyota Motor Corp., the world’s No. 1 automaker, climbed 4.2 percent as the yen’s drop to the lowest level in three months bolstered the value of overseas sales. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, climbed 3.7 percent in Tokyo as Federal Deposit Insurance Corp. Chairman Sheila Bair said large U.S. banks have enough capital. Goodman Group, Australia’s biggest industrial real estate investment trust, slumped 18 percent after reporting a first-half loss.

“Investors are looking for relief anywhere,” said Hugh Dive, who helps manage about $3 billion at Investors Mutual Ltd. in Sydney. “There’s more confidence today than earlier this week, but I’m overwhelmed by the fact that so many companies don’t know where things are going. This rally is unlikely to be sustained.”

The MSCI Asia Pacific Index advanced 1.6 percent to 75.56 at 7:21 p.m. in Tokyo, narrowing its decline this year to 16 percent. The gauge rose even after government reports showed Japan’s exports plunged by almost half in January and Hong Kong’s economy fell in the fourth quarter by the most since 1999.

Japan’s Nikkei 225 Stock Average added 2.7 percent to 7,461.22, with most markets in Asia advancing. Hong Kong’s Hang Seng Index closed 1.6 percent higher, paring an early 2.7 percent.

‘Reasonable Prospect’

WorleyParsons Ltd., Australia’s biggest engineering company, climbed 9.6 percent on a surge in first-half profit. Japan’s Advantest Corp. and South Korea’s Samsung Techwin Co. rallied more than 5 percent as brokers recommended investors buy their shares. Poly Real Estate Group Co. slumped 4.3 percent in Shanghai after Goldman Sachs Group Inc. said developers don’t expect a housing recovery in the first half of the year.

Futures on the U.S. Standard & Poor’s 500 Index edged up 0.1 percent. The gauge jumped 4 percent in New York yesterday, the most in a month, as Federal Reserve Chairman Ben S. Bernanke suggested banks need not be nationalized, adding that there was a “reasonable prospect” the recession will end this year.

MSCI’s Asian index closed yesterday at its lowest since August 2003, as the deepening global recession hurt corporate profits. Stock declines in 2009 have wiped at least $4 trillion off the value of global stocks.

Mitsubishi UFJ Financial climbed 3.7 percent to 445 yen. HSBC Holdings Plc, which gets a quarter of its revenue in North America, gained 2.7 percent to HK$55.10 in Hong Kong. Hang Seng Bank Ltd., controlled by HSBC, rose 2 percent to HK$85.30.

The FDIC’s Bair told CBS Television yesterday that large U.S. banks have adequate regulatory capital and it would be “surprising” if the government was forced to nationalize them.

Nikkei Valuations

Toyota rose 4.2 percent to 3,220 yen. Honda Motor Co., which gets half its sales in North America, jumped 8.1 percent to 2,395 yen. Canon Inc., the world’s largest camera maker, climbed 6.4 percent to 2,505 yen.

The Japanese currency depreciated against the dollar to as much as 97.33 today, the lowest level since Nov. 25, from 95.32 at the 3 p.m. close of stock trading in Tokyo yesterday. The yen dropped against the euro to as much as 125.07, the weakest since Jan. 9. A weaker yen boosts the value of overseas sales for Japanese companies when converted into the local currency.

The Nikkei lost 18 percent this year through yesterday, on mounting concern a stronger yen and waning demand will hurt company earnings. The gauge’s constituents traded at 0.85 times their corporate net worth as of Feb. 24, the lowest level on record that dates back to July 1989, according to Nikkei Inc.

Buy Recommendations

“The current currency level is far weaker than Japanese businesses are expecting and this will help ease pressure on company earnings,” Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. “All indicators suggest stocks have been oversold.”

Advantest, the world’s biggest maker of memory-chip testers, rose surged 5.4 percent to 1,426 yen. JPMorgan Chase & Co. upgraded the stock to “overweight” from “underweight,” citing proposed restructuring measures. Samsung Techwin, which makes semiconductor parts and mobile phone cameras, advanced 5.6 percent to 31,950 won after Merrill Lynch & Co. reiterated its “buy” rating, citing the benefits of a weaker currency.

WorleyParsons climbed 9.6 percent to A$14.68 after saying first-half profit rose 29 percent on acquisitions and greater demand from energy industries.

China Real Estate

Goodman Group plunged 18 percent to 24.5 cents. The company said today it is slashing more than A$1.5 billion ($1.2 billion) in projects to improve margins after property writedowns pushed the company into a first-half loss of A$465.9 million.

Poly Real Estate, China’s second-largest developer, lost 4.3 percent to 19.03 yuan. China Vanke Co., the nation’s biggest developer, fell 3.3 percent to 7.57 yuan.

China’s real estate developers don’t expect the property market to recover until at least the second half of this year, because prices have to fall further before sales improve, Goldman Sachs analysts wrote in a report.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: February 25, 2009 05:33 EST