Jan. 18 (Bloomberg) -- Asian technology shares and banks gained on speculation U.S. tax breaks and interest-rate cuts will avert a recession in the world's largest economy.

Nintendo Co., which gets more than a third of sales from the Americas, climbed from a four-month low after the yen weakened against the dollar. Commonwealth Bank of Australia gained for the first time in six days. Rio Tinto Group rose on speculation BHP Billiton Ltd. will raise a takeover offer.

``There are growing expectations among investors the U.S. government will intervene and regulators will cut interest rates substantially,'' said Hiroshi Fujimoto, who helps manage about $3.2 billion at Shinkin Asset Management Co. ``Sentiment is improving as the yen weakens against the dollar.''

The MSCI Asia Pacific Index lost 0.2 percent to 146.51 at 9:20 p.m. in Tokyo, recovering from earlier losses of as much as 2.6 percent. The gauge lost 3.4 percent for the week.

Japan's Nikkei 225 Stock Average gained 0.6 percent to 13,861.29, while the broader Topix added 0.8 percent, after earlier falling below 1,300 for the first time since September 2005. About half of Asia's benchmarks gained.

S&P 500 futures expiring in March jumped as much as 1 percent. President George W. Bush is close to completing a plan that will include $800 tax rebates for individuals and $1,600 for households plus tax breaks for businesses, people familiar with the proposal said.

Energy shares including Cnooc Ltd. declined after crude oil prices retreated. Yue Yuen Industrial Ltd., the biggest supplier of shoes to Nike Inc. and Adidas AG, slumped the most in five years after profit missed analysts' estimates.

U.S. `Suffering'

U.S. shares posted their worst three-day decline since 2002 yesterday after the Federal Reserve said manufacturing in the Philadelphia region slid to a six-year low.

The Standard & Poor's 500 Index lost 2.9 percent and is down 9.2 percent this year. Europe's Dow Jones Stoxx 600 Index, which has also slipped 9.2 percent this year, lost 0.5 percent. The MSCI regional index has dropped 6.7 percent in 2008, the worst start to a year since 1990.

``At this point, I will not sell stocks but instead look to accumulate some long positions,'' said Chua Soon Hock, who manages about $540 million at Asia Genesis Asset Management in Singapore. ``There could be a nice rebound very soon as market players discount the impact of a full-fledged U.S. recession.''

Nintendo climbed 3.8 percent to 55,300 yen, after earlier plunging 5.8 percent. Honda Motor Co., Japan's second-largest automaker, rose 0.3 percent to 3,230 yen, reversing an earlier decline of 3.1 percent.

Bush's Plan

The yen weakened to as low as 107.17 from 106.35 earlier. The currency climbed to as high as 105.92 this week. A weaker yen boosts the value of the exporters' overseas sales when converted into the Japanese currency.

Fed Chairman Ben S. Bernanke acknowledged yesterday that the economy is slowing enough to warrant a government aid plan. Futures contracts show there is a 44 percent chance the Fed will trim its target for overnight loans between banks to 3.50 percent from 4.25 percent this month.

The rest of the bets are for a cut to 3.75 percent.

``A rumor was making its round that the Fed will cut rates tonight and that caused a big squeeze on those who were short the market,'' said David Leong, who heads the Singapore trading desk at First State Investments Ltd., which manages $22 billion in global equities.

Li & Fung

Li & Fung Ltd., a Hong Kong-based supplier to Wal-Mart Stores Inc., added 1.6 percent to HK$25.70. Samsung Electronics Co., Asia's biggest maker of flat panels, chips and mobile phones, gained 1.3 percent to 567,000 won.

Shares of Samsung also gained after Advanced Micro Devices Inc., the world's second-largest maker of personal-computer processors, yesterday reported a smaller-than-expected loss after it sold more expensive chips.

Elpida Memory Inc., Japan's biggest maker of computer chips, surged 13 percent to 3,460 yen, the sharpest gain since Jan. 6, 2006. Tokyo Electron Ltd. rose 4.9 percent to 6,450 yen.

Commonwealth Bank, Australia's second-biggest bank, rose 3.2 percent to A$53.20, snapping a five-day, 9.5 percent loss and was the single biggest contributor to the MSCI index's advance. Westpac Banking Corp., the fourth-largest, added 3.4 percent to A$26.55.

Banks, Oil

Industrial & Commercial Bank of China Ltd., the country's largest bank, jumped 5.4 percent to HK$5.27 in Hong Kong after saying earnings probably rose last year by more than 60 percent. China Construction Bank Corp., the country's No. 2 bank, advanced 1.5 percent to HK$6.13.

Cnooc, China's biggest offshore oil producer, slipped 2.8 percent to HK$11.82. Mitsui & Co., Japan's No. 2 trading company, declined 1.3 percent to 1,959 yen.

Crude oil for February delivery fell 0.3 percent to $89.87 a barrel and futures have plunged 10 percent since reaching a record $100.09 on Jan. 3. The U.S. is the world's biggest energy consumer.

Yue Yuen plunged 6.8 percent to HK$24.60, the biggest decline since March 31, 2003. The company said 2007 profit rose 1.6 percent to $359.4 million, lower than the $387.4 million average estimate in a Bloomberg survey of analysts.

Rio Tinto Group, the world's third-largest mining company, rose 4.6 percent to A$124 on speculation BHP Billiton Ltd. is preparing a higher offer for the company.

BHP may bid 3.5 shares and A$16 ($14) for each Rio share, said Michael Birch, who helps manage the equivalent of $140 million at Wallace Funds Management in Sydney. London-based Rio rejected a three-for-one stock proposal from BHP in November.

Amanda Buckley, a spokeswoman for Rio Tinto, and BHP spokeswoman Samantha Evans both declined to comment.

To contact the reporters for this story: Chen Shiyin in Tokyo at schen37@bloomberg.net; Emma O'Brien in Wellington on eobrien6@bloomberg.net.

Last Updated: January 18, 2008 07:30 EST