July 6 (Bloomberg) -- Asian stocks fell for the first time in seven days as higher bond yields sparked speculation that investors will shift money from equities.

Tokyo Electric Power Co. and shopping-mall owner Westfield Group led declines by companies that rely on paying high dividends to attract fund managers.

``Real estate, electric power and other public utilities, these are the interest-rate sensitive sectors and they will underperform if rates continue to rise,'' said Masaki Iso, who overseas about $7.3 billion as head of Japanese equities Yasuda Asset Management Co. in Tokyo.

Samsung Electronics Co., the world's largest maker of computer-memory chips, surged the most in more than two years after Morgan Stanley raised its rating on the stock. China's CSI 300 Index posted its biggest gain in five months on speculation the government will take measures to support share prices.

The Morgan Stanley Capital International Asia-Pacific Index dropped 0.2 percent to 156.17 at 7:45 p.m. in Tokyo. More than five stocks fell for each four that rose. The measure closed at a record yesterday following a six-day, 3.7 percent rally. It has added 2.1 percent this week, the most in six weeks.

Japan's Nikkei 225 Stock Average slipped 0.4 percent while Australia's S&P/ASX 200 Index fell 0.2 percent. Benchmarks also declined in the Philippines, New Zealand and Sri Lanka. South Korea's Kospi index climbed 6.7 percent this week, its best performance since November 2005. Thailand's SET Index headed for its biggest weekly gain in four years.

Toyota Motor Corp. led exporters lower as U.S. Treasury yields rose following private reports showing the world's largest economy is adding more jobs than previously forecast.

Lured Away

Shares of companies that typically pay high dividends slid as rising regional bond yields lured investors away from stocks.

Tokyo Electric, Asia's biggest utility company, slipped 2 percent to 3,930 yen. Bonds yields in Japan headed for the biggest weekly advance in a month. The yield on the benchmark 10- year bond rose 1 basis point to 1.93 percent, compared with Tokyo Electric's 1.8 percent gross dividend yield.

Westfield, the world's largest shopping-center owner by market value, fell 0.7 percent to A$20.01. National Australia Bank Ltd., the nation's largest lender, dropped 1.7 percent to A$40.14.

Australia's 10-year government bond yielded 6.237 percent, an increase of 2.7 basis points, or 0.027 of a percentage point. That's higher than Westfield's dividend yield of 5.4 percent, National Australia's 5.9 percent and Commonwealth Bank's 6.2 percent.

``A higher yield environment leads to a lower propensity to borrow because of the costs associated with higher interest rates,'' said Atul Lele, who helps manage the equivalent of $380 million at White Funds Management in Sydney.

Stock Upgrades

Samsung Electronics jumped 6.1 percent to 627,000 won, its biggest gain since January 2005. Morgan Stanley in a report raised its recommendation on the stock to ``overweight'' from ``equal-weight,'' saying the company's earnings are expected to ``gradually improve into 2008.''

Hynix Semiconductor Inc., the world's second-largest computer memory maker, added 4.7 percent to 37,600 won, its highest since September. The stock was raised to ``buy'' from ``neutral'' at UBS AG, which cited a recovery in chip prices, according to a report late yesterday.

China's CSI 300 climbed 4.9 percent, the biggest gain since Jan. 15, with Shenzhen Development Bank Co. and Citic Securities Co. leading the rebound as speculation of government support measures took hold.

The index has dropped 13 percent since its June 19 peak on concern plans by fund managers to invest in overseas markets, a decline in new investors and a tripling of the tax of share trading will lure money away from shares.

Government Support

``Rumors emerged that stamp duty will be cut, triggering buying interest,'' said Wu Kan, an analyst at Shanghai Securities Consulting Co. in Shanghai. ``It's possible the government will do something now to stem the decline.''

Shenzhen Bank, controlled by buyout firm TPG Inc., advanced 7.2 percent to 27.01 yuan, snapping an eight-day, 29 percent decline. Citic Securities, China's biggest publicly traded brokerage, jumped 6.8 percent to 52.89 yuan. The shares lost 5.2 percent in the previous two days.

Japan's Toyota, the world's largest automaker by market value, slid 0.8 percent to 7,780 yen. Canon Inc., the biggest digital-camera maker, fell 1.1 percent to 7,200 yen. Taiwan Semiconductor Manufacturing Co., the largest producer of custom- made chips, lost 1.3 percent to NT$70.50.

Ten-year U.S. treasury notes yesterday declined the most since June 12 after, lifting the yield to 5.14 percent. The better-than-expected jobs report sparked speculation the Federal Reserve will delay cutting rates in the largest market for Asian- made products.

Innolux

Seiko Epson Corp., Japan's largest maker of inkjet printers, climbed 5.7 percent to 4,090 yen. The stock gained the most since July 2004 after Goldman, Sachs & Co. raised its rating on Seiko Epson to ``buy,'' citing the prospect of higher sales of printers and mobile-phone liquid-crystal displays.

Innolux Display Corp., the world's second-largest maker of LCD computer monitors, jumped 6.7 percent to NT$158.50 in Taiwan. Innolux's share-price forecast was raised to NT$180 from NT$148 by George Chang, an analyst at Citigroup. Chang kept his ``buy'' recommendation for the stock as the company ``continued market- share gains,'' according to a note dated yesterday.

Canon Inc. (7751 JT)
Citic Securities Co. (600030 CH)
Hynix Semiconductor Inc. (000660 KS)
Innolux Display Corp. (3481 TT)
National Australia Bank Ltd. (NAB AU)
Seiko Epson Corp. (6724 JT)
Taiwan Semiconductor Manufacturing Co. (2330 TT)
Tokyo Electric Power Co. (9501 JT)
Toyota Motor Corp. (7203 JT)
Samsung Electronics Co. (005930 KS)
Shenzhen Development Bank Co. (000001 CH)
Westfield Group (WDC AU)

To contact the reporter on this story: Darren Boey in Hong Kong at dboey@bloomberg.net

Last Updated: July 6, 2007 06:47 EDT