TOKYO (Bloomberg) -- Asian stocks gained for a third day on speculation the U.S. Federal Reserve will lower interest rates to alleviate a credit crisis and sustain growth in the world's biggest economy.

Elpida Memory Inc. and Posco rose after Fed Chairman Ben S. Bernanke agreed to use “all of the tools” at his disposal to restore market stability, following on from central banks' $350b injection of emergency liquidity into the global economy.
“Central banks are showing investors they know how serious the problem is and are prepared to take further action,” said Kim Young Joon, who manages $2.1b at NH-CA Asset Management in Seoul. “That's helping stop people from rushing out of funds. It will take time, but the fire will get put out.”
Australia's CSL Ltd., the world's second-largest maker of blood plasma products, gained after forecasting an increase in profit. Yahoo Japan Corp. jumped after Goldman, Sachs & Co. lifted its recommendation on the shares to “buy”.
The Morgan Stanley Capital International Asia-Pacific Index gained 0.4 percent to 145.04 as of 6:43 p.m. in Tokyo. Japan's Nikkei 225 Stock Average was little changed while the TOPIX index lost 0.3 percent. Toyota Motor Corp. and Nissan Motor Co. declined after Japan's auto exports slowed, the yen strengthened and Goldman cut its stock price estimates for the companies.
Hong Kong's Hang Seng Index rose 2.8 percent, completing a three-day 9.6 percent gain amid speculation China will expand a program allowing its citizens to buy Hong Kong-traded shares.
The CSI 300 Index exceeded 5,000 for the first time in China, where the central bank said it was raising interest rates for a fourth time since March. Benchmarks gained elsewhere across the region, except in the Philippines and Sri Lanka.
------------- “All tools""
The Standard & Poor's 500 index rose for a fourth day climbing 0.1 percent, and the Dow Jones Industrial Average lost 0.2 percent. U.S. 10-year notes fell for the first time in five days on concern Fed interest rate cuts would push the dollar down and lead to faster inflation.
Senate Banking Committee Chairman Christopher Dodd said Bernanke had agreed to use “all of the tools at his disposal” to restore stability in financial markets roiled by a sub-prime mortgage crisis. The Fed, the European Central Bank, and their counterparts elsewhere have already pumped $350b of emergency funds into the global economy in the past two weeks.
------------ Elpida, CSL
Elpida, Japan's largest memory-chip maker, advanced 5 percent to 4,800 yen. Hynix Semiconductor Inc., the world's third-biggest maker of NAND flash memory, gained 2.2 percent to 36,750 won in South Korea. South Korea's Posco, the world's fourth-biggest steelmaker, added 2.6 percent to 500,000 won.
Chipmakers also climbed after UBS AG analyst Benjamin Reitzes said in a note that Apple Inc. may sell more than 800,000 iPhones this quarter, beating the company's goal of 730,000, as consumer demand for the device stays strong.
Melbourne-based CSL jumped 3.2 percent to A$93.06. Net income may rise as much as 30 percent to A$700 million ($539m) in the current year, CSL said. The company posted a record profit of A$539 million for the year ended June 30 and plans to buy back 4.5 percent of its stock.
“The negative sentiment associated with the credit crunch issue we've seen flatten out with profit results being so good,” said Angus Gluskie, who helps manage the equivalent of about $380m at White Funds Management in Sydney.
------------ Trade surplus shrinks
Yahoo Japan, the local unit of world's most-visited Internet directory, surged 5.7 percent to 38,700 yen. The company is poised to benefit from expansion of advertising related to its search engine, Natsuko Higuchi, an analyst at Goldman, wrote in a note upgrading the shares to “buy”.
Toyota, Japan's biggest carmaker fell 0.5 percent to 6,550 yen. Honda Motor Co., the No. 2, dropped 1.1 percent to 3,630 yen. Nissan, the third largest, lost 1.5 percent to 1,107 yen.
Japan's trade surplus shrank 21.1 percent to 671.2 billion yen ($5.9b) in July, the finance ministry said Wednesday. That's less than the 844 billion yen forecast by economists in a Bloomberg survey. Growth in automobile exports slumped to 12.8 percent from 24.6 percent the previous month.
The yen strengthened to 114.37 against the dollar at the close of trading in Tokyo from 114.84 at Tuesday's close. A stronger yen decreases the value of Japanese exporters' dollar-denominated sales when converted into local currency.
Kota Yuzawa, a Tokyo-based analyst at Goldman cut his share-price estimate on all three automakers, citing a strengthening yen and the continued danger that the U.S. housing crisis will curb consumer spending.
------------- Lower bond yields
“The credit squeeze triggered by the U.S. sub-prime problem poses two major risks for auto stocks: slowdown in U.S. auto demand and yen appreciation,” Yuzawa wrote in a note.
Japanese financial shares slid after the yield on government bonds dropped to its lowest in six months, indicating the lenders will make less money on their investments.
Sumitomo Mitsui Financial Group Inc., Japan's third-largest bank, lost 1.8 percent to 884,000 yen. Millea Holdings Inc., its largest insurer by market value, fell 2.3 percent to 4,210 yen.
Best Denki Co. surged 11 percent to 724 yen after rival Yamada Denki Co., Japan's largest consumer electronics retailer, took a 5.24 percent stake in the company. Yamada Denki added 1 percent to 11,470 yen