Japanese stocks rose for the week amid evidence that an export-led recovery is fueling growth in the world's second-biggest economy. JFE Holdings Inc, a steelmaker, and Mitsui Sumitomo Insurance Co led gains.

　　Taiwan's benchmark stock index had its biggest weekly decline since the September 11, 2001, terror attacks in the United States on concern protests over last week's election may deter investors.

　　The morgan Stanley Capital International Asia-Pacific excluding Japan Index slid 2.2 percent as benchmarks in South Korea, the Philippines, Indonesia, Thailand, Hong Kong, Malaysia, Singapore and Australia fell. They rose in Sri Lanka, New Zealand and were mixed in China's mainland.

　　Japan's topix index climbed 3.4 percent this week to 1,176.32, the highest since August 2001. The 1,547-member index has advanced 12 percent this month measured in dollars, making it the best performer among the 59 major national stock benchmarks tracked by Bloomberg News. Both the Standard & Poor's 500 and Europe's Dow Jones Stoxx 600 Index have dropped this year in dollar terms.

　　"The Japanese stock market is starting to become the center of the world's attention," said Toru Ohara, who oversees US$2.8 billion as the chief investment officer at Franklin Templeton Investments Japan Ltd in Tokyo.

　　Investors have been treated to a series of positive economic reports from Japan this week. A government report on Monday showed land prices in the Tokyo region fell 4.9 percent last year, the least since 1997, suggesting that deflation may be easing. An index published on Tuesday tracking the nation's service industries grew 2.6 percent in January from December, the fastest pace in almost four years.

　　Japan had its first trade surplus with China in more than a decade, a report on Thursday showed. Spending by households headed by a salaried worker rose 6.9 percent last month from a year ago, the government said yesterday.

　　"Japan's growth is no longer dependent only on exporters," said Ohara. "We've got some evidence of growth being generated from domestic consumption." The economy in the fourth quarter grew at the fastest pace in 13 years.

　　Jfe holdings, the nation's second-largest steel producer, soared 12 percent. Nippon Steel Corp, Japan's biggest steelmaker, advanced 8 percent. The Nihon Keizai newspaper reported yesterday steelmakers will increase prices as much as 10 percent on shipments to automakers and shipbuilders.

　　Surging demand from China's mainland, which consumes more than a third of the world's steel, is also boosting profits at Japan's two biggest steelmakers.

　　Mitsui sumitomo Insurance climbed 12 percent. The Nihon Keizai newspaper said Japan's nine largest life insurance companies have unrealized gains of as much as 5 trillion yen (US$47 billion) as the value of their stock holdings surged.

　　Topix sub-indexes tracking companies with business in iron and steel, insurance, banking, maritime transport, glass and ceramics, chemicals and real estate all climbed more than 5 percent for the week.

　　Taiwan's twse Index slumped 10 percent this week, paring its advance this year to 4 percent. China Airlines, Taiwan's largest carrier, and EVA Airways Corp, the island's second-largest airline, both tumbled 29 percent in the week.

　　Taiwan semiconductor Manufacturing Co, the world's biggest maker of made-to-order computer chips, slid 7.1 percent.

　　South korean stocks fell as political unrest in Taiwan focused attention among some investors on the instability of South Korea's government since the impeachment of President Roh Moo Hyun. The Kospi index declined 2.2 percent for the week.

　　"The impact from unstable political situations on a neighboring country's stock market revived concern about the effect of political instability in Korea," said Kim Young Joon, who manages the equivalent of US$250 million at Samsung Investment Trust Management Co in Seoul.

　　(Bloomberg News)