Sept. 12 (Bloomberg) -- Asian stocks climbed, with Japan's benchmarks set for their highest close in more than four years, after Prime Minister Junichiro Koizumi won a landslide election victory, giving him a mandate to sell state assets.

Banks including Mizuho Financial Group Inc. and brokerages such as Nomura Holdings Inc. led the gain on expectation Koizumi will be able to push ahead with his plans to cut state debt and bolster growth in the world's second-largest economy. A report showed the economy grew in the second quarter at three times the pace the government had initially estimated.

Koizumi is ``going to be more aggressive on change,'' said David Herro, who runs the $5.7 billion Oakmark International Fund as chief investment officer for international equities at Chicago- based Harris Associates LP. ``The fact that growth is coming on will take pressure off the U.S. and that will not only be good for Pacific-Rim growth, but for the global economy.''

Taiwan's Compal Electronics Inc., which makes notebook computers for Toshiba Corp., and Singapore's CapitaLand Ltd., which has two property funds in Japan, advanced.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 1,000 companies, rose 0.9 percent to 109.26, the highest since September 2000, at 2:33 p.m. in Tokyo. South Korea's Kospi index is set to close at a record high for a fourth day. Indexes in the Philippines and New Zealand fell, and gained elsewhere in the region. Benchmarks in Australia, Malaysia and China were little changed.

Majority Rules

Japan's Nikkei 225 Stock Average advanced 1.3 percent to 12,851.72. The Topix index added 1.1 percent. The benchmarks are set for the highest close since June 2001.

Mizuho, Japan's largest bank by assets, climbed 3.8 percent to 636,000 yen. Mitsubishi Tokyo Financial Group Inc., which will become the world's largest by assets after merging with UFJ Holdings Inc., added 3.6 percent to 1.16 million yen. Sumitomo Mitsui Financial Group Inc., the third-largest lender, rose 3.6 percent to 926,000 yen.

With the victory, the Liberal Democratic Party and its coalition partner New Komeito hold 68 percent of the 480 seats in the lower house. Koizumi called for elections on Aug. 8 after some legislators from his own party voted with the opposition to block his plan to sell Japan Post, the world's largest savings bank with 350 trillion yen ($3.2 trillion) in assets.

The win gives Koizumi a mandate to accelerate spending cuts, pursue policies to boost investment and sell the post office, which has been used to pay for government spending that's swollen Japan's debt to a record.

`Overwhelming'

``An election victory that is so overwhelming will give Koizumi a mandate, not just to privatize the postal system, but a general mandate for reform,'' Brent Lynn, who runs the $2.2 billion Janus Overseas Fund at Janus Capital Group Inc. in Denver, said in a telephone interview from Hong Kong. ``It's a spectacular result.''

Overseas investors have been net buyers of Japanese stocks for the past 12 weeks, according the Ministry of Finance.

Measures tracking banks, insurers and brokerages had three of the five biggest gains among the Topix's 33 industry groups.

Nomura, the nation's biggest brokerage, climbed 1.6 percent to 1,503 yen. Millea Holdings Inc., Japan's biggest insurance firm, climbed 3.8 percent to 1.65 million yen.

A government report before the market open showed the economy grew at a 3.3 percent annual pace in the second quarter, three times as much as its initial estimate and more than all 18 economists had expected in a Bloomberg News survey.

Japan Effect

CLSA Ltd.'s Christopher Wood, the top-ranked Asian equity strategist in Institutional Investor's latest survey, recommended investors buy Japanese stocks such as Mizuho and Mitsubishi Estate Co. that will benefit from the nation's economic growth.

John Vail, chief strategist at JPMorgan Chase & Co.'s brokerage unit in Tokyo, raised the year-end estimate for the Topix by 5.9 percent to 1350 in an e-mailed note to clients today.

In Taiwan, the Taiex index gained 0.8 percent, while Singapore's Straits Times Index climbed 0.6 percent.

Compal advanced 1.1 percent to NT$33.65. Quanta Computer Inc., which counts Matsushita Electric Industrial Co. among its customers, added 3.2 percent to NT$55.20.

Taiwan's exports to Japan in the past 12 months rose 8.5 percent to $13.9 billion from the same period a year ago. In the period, Japan accounted for 7.6 percent of the island's exports.

CapitaLand, Southeast Asia's top developer, rose 1.7 percent to S$3.02. The company has said it may tie up with Wal-Mart Stores Inc. or a retailer in Japan to expand in the country.

South Korea

``Because Japan is the largest economy in Asia, any positives pushing its markets higher are also good for the rest of the region,'' said Choi Chang Hoon, who helps manage $770 million at Woori Asset Management Co. in Seoul.

The Kospi rose 0.9 percent to 1162.38. On Sept. 7, the index surpassed a record closing high that stood for almost 11 years.

Samsung Securities Co. led gains by brokerages on expectations earnings will climb as trading increases. Shares valued at an average 3 trillion won ($3 billion) have changed hands daily in the past three months. That's 24 percent more than the daily average in the first six months of the year.

Samsung Securities, South Korea's largest brokerage by market value, jumped 7.7 percent to 41,200 won.

Daewoo Securities Co., the second largest, rose 6.6 percent to 12,850 won. The company said on Sept. 10 its profit in August more than doubled to 30 billion won from a year ago.

Elsewhere, Japan's TIS Inc., which provides system construction and data processing services, slumped 13 percent to 2,620 yen, set for its biggest drop in almost 12 years. The company slashed its half-year profit forecast by 44 percent and three analysts lowered their recommendations on the stock.

The drop was the biggest in percentage terms in the MSCI World Index, which tracks more than 1,800 stocks.

To contact the reporter on this story: Michael Tsang in Tokyo at mtsang1@bloomberg.net; Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net

Last Updated: September 12, 2005 01:43 EDT