SINGAPORE (Bloomberg) -- Asian stocks advanced for a second day after reports in Japan showed an unexpected drop in unemployment and a rise in household spending.

Mizuho Financial Group Inc. climbed to a three-month high, on speculation the improving economy will allow the Bank of Japan to lift interest rates, widening lenders' profit margins. China's CSI 300 Index rose to its third straight record as households poured more money into equities, drawn by a rally that's made the benchmark the world's best performer this year. “The positive economic data from Japan is helping sentiment for the rest of the region,” said Leslie Phang, who helps manage about $1 billion at Commonwealth Private Bank in Singapore. “China's continued rally also augurs well for Asia as a sudden sell-off will spook investors.”

The Morgan Stanley Capital International Asia-Pacific Index added 0.7 percent to 149.26 at 8:01 p.m. in Tokyo. Technology stocks rose after Sanyo Electric Co. forecast its first annual profit in four years and CJ Investment & Securities Co. said earnings at LG.Philips LCD Co. will improve.

Japan's Nikkei 225 Stock Average climbed 0.5 percent to 17,672.56, while the broader Topix index gained 0.8 percent. Mitsui O.S.K. Lines Ltd. advanced after UBS AG reaffirmed its bullish stance on shipping companies.

BHP Billiton Ltd. led mining stocks higher in Australia as prices of metals including copper advanced and on speculation of takeovers within the industry. Coles Group Ltd. dropped after U.S. buyout company Kohlberg Kravis Roberts & Co. abandoned its nine-month pursuit of the Australian retailer.

Benchmarks rose, except in Hong Kong, Indonesia, Malaysia, Pakistan and Sri Lanka. Thailand was little changed.

Mizuho rises

The U.S. stock market was closed Monday for the Memorial Day holiday. Nine of the 18 western European markets, including the U.K. and Germany, were also shut for holidays.

Japan's Topix banks index accounted for 27 percent of the benchmark's climb, the most of any single industry group. Mizuho, Japan's second-largest lender by assets, rose 2.3 percent to 864,000 yen, its highest close since Feb. 23. Sumitomo Mitsui Financial Group Inc., the third largest, advanced 1.7 percent to 1.18 million yen.

Japan's unemployment rate declined to 3.8 percent from 4 percent, where it had been stuck since November, the statistics bureau said Tuesday in Tokyo. The median estimate of 34 economists surveyed by Bloomberg News was for the number to stay unchanged. Household spending rose 1.1 percent, the bureau said separately, more that the 0.2 percent median expectation of 35 economists. “Today's jobs data was broadly encouraging,” said Jeremy Hall, who helps oversee $3.5 billion at Henderson Global Investors Ltd. in Singapore. “These things conspire to indicate Japan can surprise on the upside. There are reasonable hopes for a better consumption outlook this year than last year.”

Shifting funds

China's CSI 300 rose 2.4 percent to a record. The value of shares traded on the Shanghai and Shenzhen stock exchanges was a record $50.9 billion Monday, exceeding the $43.9 billion that changed hands on the New York Stock Exchange on May 25.

Gemdale Corp., a Chinese developer that's partnered with ING Groep NV, gained 10 percent to 31.13 yuan. Datong Coal Industry Co., China's second-largest coal company by capacity, surged 10 percent to 26.47 yuan. Households are shifting funds into the stock market, seeking better returns than they can get on their bank deposits. The central bank's benchmark one-year deposit rate, a ceiling for deposit rates commercial banks can offer, is 3.06 percent, little more than the nation's 3 percent inflation rate.27

New investors A Shanghai

Securities News report said the tally of China's brokerage accounts may have reached 100 million as of Monday, citing its own estimate. China had 99.82 million accounts as of “Liquidity keeps flowing into the market as a result of the entry of some new investors,” said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai, which manages about $517 million. “There is still room for the upside on the market.”

Sanyo, the world's largest maker of rechargeable batteries, jumped 10 percent to 213 yen. The company Monday forecast a net income of 20 billion yen ($164 million) this fiscal year, after reporting a 45.4 billion yen net loss in the year ended March 31. Fourth-quarter loss shrank by 50 percent to 34.4 billion yen, Sanyo said.