ASIAN stocks advanced yesterday, sending the region's benchmark to a three-month high, as financial companies rose on speculation the worst is over for credit-market losses.

Macquarie Group Ltd gained in Sydney and Kookmin Bank climbed in Seoul after UBS AG upgraded United States bank stocks, citing "reduced systemic risks."

Mitsubishi UFJ Financial Group Inc and Mizuho Financial Group Inc led a measure of Japanese banks to the highest this year on optimism lending rates will rise. Samsung Electronics Co, Asia's largest maker of chips, advanced in Seoul after brokerages lifted share price estimates.

"The market believes the credit crisis is over," said Hiromichi Tsuyukubo, director of investments at Tokyo-based Myojo Asset Management Japan Co, which manages about US$500 million.

The MSCI Asia Pacific Index gained 0.9 percent to 150.51 in Tokyo, its highest since January 15. Financial stocks climbed the most among the gauge's 10 industry groups. Most of Asia's benchmark indexes advanced.

Japan's Nikkei 225 Stock Average rose 0.2 percent to 13,894.37 after earlier exceeding 14,000 for the first time since February 27. Brother Industries Ltd, the maker of fax machines and printers, soared the most in more than five years after Mizuho Securities Co upgraded its stock rating.

Macquarie Group, Australia's biggest securities company, jumped 5.7 percent to A$62.75 (US$58.75), the steepest gain in the nation's S&P/ASX 200 Finance index. National Australia, the country's largest bank, climbed 3.2 percent to A$30.25. Kookmin Bank, No. 1 in South Korea, rose 4.2 percent to 68,900 won (US$69.17).

UBS raised US bank stocks to "neutral" from "underweight," saying the return to balance sheet stability is happening faster than expected, aided by capital injections and improvement in credit markets.

"The biggest factor boosting the banks is the improving view on the US financials," said Mo Jae Sung, a fund manager in Seoul.