Japanese stocks advanced, led by lenders such as Mizuho Financial Group Inc, after the nation's top bank regulator called on the government and central bank to cooperate to safeguard the economic recovery.

　　Bank stocks also rose as some investors switched their holdings from computer-related shares, which fell after an industry report forecast a slowdown in chip demand.

　　Investors are looking "elsewhere for safer options and domestic-related stocks are looking attractive," said Norihito Kanai, who helps oversee US$2.5 billion at Meiji Dresdner Asset Management Co in Tokyo. "We are likely to see some slowdown in growth prospects of technology companies."

　　The Nikkei 225 Stock Average climbed 0.3 percent to 11,532.04 at the close in Tokyo. It dipped 0.6 percent before the comments by Heizo Takenaka, the minister for economic and fiscal policy. The Topix index added 0.2 percent, with bank stocks contributing the most to the advance.

　　The Morgan Stanley Capital International Asia-Pacific Index, measured in dollar terms, added 0.7 percent. Benchmark indexes rose in Australia, New Zealand, Taiwan, Malaysia, Thailand and Sri Lanka. They fell in South Korea, Singapore, the Philippines, Hong Kong, Indonesia, China's mainland and India.

　　Mizuho Financial, Japan's largest lender by assets, jumped 4 percent to 388,000 yen (US$36,472). UFJ Holdings Inc, the nation's fourth-largest bank, climbed 2.2 percent to 566,000 yen.

　　Some computer-related stocks, such as Samsung Electronics Co and Rohm Co, fell after market research firm IDC said growth in global sales of computer chips will peak in 2004 at 18 percent and slow to 7.8 percent annual growth in the next four years.

　　The computer-related group of the MSCI Asia-Pacific Index was 2004's best performing industry until yesterday, after surging 72 percent from its low last year.

　　"Much of the technology-driven rally starting last year is probably over," said Martin Schulz, who oversees the US$480 million Armada International Equity Fund, which includes Asian technology stocks, in Cleveland. He counts Samsung Electronics among his biggest holdings.

　　Samsung Electronics, the world's largest maker of computer memory chips, shed 1.8 percent to 539,000 won (US$453.89), after last week setting a record. Hynix Semiconductor Inc, the fourth-largest maker of computer memory chips last year according to IDC, fell 2.4 percent to 9,430 won.

　　Rohm, one of Japan's largest makers of chips for cell phones, dropped 2.8 percent to 13,010 yen.

　　Japan's Advantest Corp and Tokyo Electron Ltd slid after a government report on machinery orders fell 12.2 percent in January, raising concern capital spending won't contribute as much to growth in the world's second-biggest economy.

　　"We are likely to see some slowdown in growth prospects of technology companies," said Norihito Kanai, who helps oversee US$2.5 billion at Meiji Dresdner Asset Management Co in Tokyo. He favors retailers such as Ito-Yokado Co, Japan's biggest.

　　Advantest, the world's biggest maker of memory-chip testing equipment, slipped 2.1 percent to 8,450 yen. Tokyo Electron, the world's second-largest maker of chip-production machines shed 1 percent to 6,790 yen.

　　Oil refiners such as Nippon Oil rose on optimism profit as a percentage of sales is rising. Nippon Oil, Japan's largest refiner, added 3.6 percent to 604 yen, the highest in 20 months.

　　Higher gasoline and other fuel prices have boosted profits at these refiners, said Toshinori Ito, an analyst at UBS Securities Japan Ltd in Tokyo. "More investors are becoming aware of that, prompting the increased interest in oil stocks."

　　Taiwan's TWSE Index led gains in Asia, rising 1.1 percent to 6,973.90. Cathay Financial Holding Co advanced on optimism of more takeovers in the banking industry. Land Bank of Taiwan and Central Trust of China may form the island's second-largest financial holding company by assets, the Commercial Times said.

　　(Bloomberg News)