[mussmicky]

Asian stocks (MXAP) rebounded from a three- week low as South Korean shares pared yesterday’s losses, while the won and Australian dollar climbed. The euro traded 0.5 percent from an 11-month low before Spain sells securities.

The MSCI Asia Pacific Index added 0.3 percent at 11 a.m. in Tokyo and Standard & Poor’s 500 Index futures gained 0.6 percent. The Kospi index jumped 0.8 percent following a 3.4 percent drop yesterday and the won rose 0.5 percent after slumping yesterday amid news of North Korean leader Kim Jong Il’s death. The Aussie added 0.4 percent, while the euro was little changed at $1.3002. Oil advanced a second day.

KB Asset Management Co. said it was buying South Korean debt, betting declines after Kim’s death won’t last. The Reserve Bank of Australia said in minutes released today that the economy and those of its trading partners are expanding even amid Europe’s debt crisis. A separate report is forecast to show U.S. housing starts increased. Spain is due to auction three-and six-month bills and figures may show German business confidence deteriorated.

“Expectations are very low and hopefully policy makers will get together to provide a solution.” Binay Chandgothia, Hong Kong-based portfolio manager at Principal Global Investors, said in an interview on Bloomberg Television. “We expect 2012 to end with positive returns for equity investors.”

About three shares rose for every two that fell on MSCI’s Asia Pacific Index, which dropped 1.8 percent yesterday to the lowest close since Nov. 25. Japan’s Nikkei 225 Stock Average gained 0.5 percent. Honda Motor Co. (7267) rallied 2.3 percent, the first gain in six days, after the automaker said it will double production at a plant in England.

U.S. Economy
S&P 500 futures expiring in March signal the benchmark stock index may rebound from yesterday’s 1.2 percent loss. Housing starts climbed 1.1 percent in November from the previous month to 635,000, according to a Bloomberg News survey before today’s Commerce Department report.

Treasury 10-year yields increased one basis point to 1.82 percent. Federal Reserve Bank of Richmond President Jeffrey Lacker predicted yesterday the economy will grow 2 percent to 2.5 percent next year, with inflation likely to meet goals.

The won traded at 1,169.41 per dollar today after touching 1,179.95 yesterday, the weakest level since Oct. 7. South Korean financial markets have recovered fast from North Korea-related shocks in the past, Vice Finance Minister Shin Je Yoon said at a meeting today. Speco Co., a defense equipment maker, jumped 15 percent in Seoul.

KB Asset Management Co., a unit of South Korea’s second- largest financial services group, purchased bond futures yesterday after prices slid to seven-week lows, according to Moon Donghoon, who oversees 11 trillion won ($9.3 billion) as managing director of fixed-income in Seoul. Stocks may become attractive, according to Franklin Templeton Investments, which had more than $675 billion under management as of Nov. 30.

Korea Rebound
“The currency is gaining in tandem with the Kospi,” said Han Sung Min, a Seoul-based currency dealer at Busan Bank. “In previous North-related risks, the won fell a lot on the day of the news, before rebounding the following day. It shows investors have learned a lesson from the past.”

The Aussie climbed to 99.34 U.S. cents after the RBA said in minutes of its Dec. 6 meeting that investment in the domestic economy and expansion among its main trading partners had tempered the need for lower interest rates.

The euro was little changed at 101.48 yen. Euro-area governments yesterday said they will boost their anti-crisis efforts by pledging to provide 150 billion euros ($195 billion) to the International Monetary Fund.

Ifo Survey
German business confidence may have weakened in December for the fifth time in six months. The Munich-based Ifo institute’s business climate index, based on a survey of 7,000 executives, probably fell to 106 from 106.6 in November, according to the median estimate of economists in a Bloomberg News survey before the data is released today.

The cost of protecting Asia-Pacific corporate and sovereign bonds from default dropped, with the Markit iTraxx Australia index falling two basis points to 193 basis points, according to Australia & New Zealand Banking Group Ltd. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined two basis points to 214.5 basis points as of 8:48 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show.

Oil for January delivery climbed as much as 0.8 percent to $94.58 a barrel. U.S. crude inventories dropped 2 million barrels last week, according to the median of seven analyst estimates before the weekly Energy Department report. Copper in London gained 0.7 percent to $7,310 a metric ton, advancing for the third time in four days, and zinc climbed 1.4 percent to $1,864 a ton.