June 24 (Bloomberg) -- Japanese stocks, Asian real estate and commodities are investors' best bets as faster inflation erodes returns in the rest of the world's markets, investor Marc Faber said.

``Demand for commodities and oil will not vanish,'' Faber, the Gloom, Boom & Doom Report publisher, said at a conference in Tokyo. ``The shift in demand that drove up commodity prices is not going to go away.''

Record prices for commodities have accelerated inflation around the world and lifted shares of raw material and energy producers. Oil more than doubled since the beginning of last year, while products including coal, rice and fertilizer also reached record highs in 2008.

Faber, who told investors to buy gold as the metal began a seven-year rally, predicted inflation may boost Japanese share prices and Asian property will benefit as more people gain access to mortgages.

``For Japan, inflation is favorable,'' said Faber, who oversees about $300 million at Hong Kong-based Marc Faber Ltd. It ``will bring cash out of the mattress and into equities and real estate.''

Japan's benchmark inflation measure, which excludes fresh food and includes energy costs, climbed 0.9 percent in April from a year earlier and rose 1.2 percent in March, the fastest pace since 1998, according to the statistics bureau. Japan's Topix Index has rallied 17 percent since March 17, when the measure sank to the lowest since June 2005. The gain pared the stock benchmark's decline for the year to 8.6 percent.

To contact the reporters on this story: Patrick Rial in Tokyo at prial@bloomberg.net; Lynn Thomasson in New York at lthomasson@bloomberg.net.

Last Updated: June 24, 2008 12:17 EDT