SHANGHAI (Bloomberg) -- Asian stocks advanced for the first time in three days on speculation a stronger dollar will boost profits for exporters of cars and consumer electronics.

Toyota Motor Corp., Japan’s largest vehicle maker, gained the most in a week. Fuji Heavy Industries Ltd. surged after Morgan Stanley raised its rating, citing benefits from the weaker yen. China Merchants Bank Co. led Chinese shares lower for a second day after the central bank ordered lenders to set aside more reserves and a report on Wednesday showed producer-price inflation accelerated.
The MSCI Asia Pacific Index added 0.2 percent to 143.80 at 1:44 p.m. in Tokyo, after earlier falling as much as 0.6 percent. The benchmark lost 4.6 percent in the previous two days.
Most Asian equity markets advanced, led by Japan’s Nikkei 225 Stock Average, which climbed 1.1 percent to 14,168.73. China’s CSI 300 Index tumbled as much as 3.4 percent, extending Tuesday's 8.1 percent drop. Vietnam’s VN Index fell for a record 25th day after policy makers raised interest rates to the highest in Asia to tame the quickest inflation since at least 1992.
Most U.S. stocks fell for a third day on Tuesday, led by raw- materials and energy producers. Energy and metal prices dropped after Federal Reserve Chairman Ben S. Bernanke said economic risks have faded, spurring bets that interest rates will rise and bolster the dollar. Standard & Poor’s 500 Index futures were up 0.2 percent recently.
Toyota Motor Corp., which gets about half of its profit from North America, rose 2.8 percent to 5,570 yen. CLSA Ltd. raised the carmaker’s operating profit forecast by 13 percent, saying that the falling yen will lift earnings.
--------Canon, Nintendo
Canon Inc., the world’s biggest maker of digital cameras, gained 3.4 percent to 5,520 yen. Nintendo Co., maker of the Wii game console, advanced 1.6 percent to 56,800 yen.
The yen dropped to as low as 107.46 versus the dollar on Wednesday, after slumping 2.3 percent in the previous two days to a level not seen since Feb. 26. A weaker yen increases the value of Japanese exporters’ dollar-denominated sales when converted into local currency.
Fuji Heavy, the maker of Subaru cars, rallied 9.2 percent to 583 yen, on course for its highest close since Nov. 7. Morgan Stanley raised its rating on the shares to “equal weight” from “underweight,” because of better-than-expected sales on new models.
Elpida Memory Inc. gained 1.7 percent to 4,100 yen. Mizuho Financial Group Inc. raised its rating on Japan’s largest maker of computer memory chips to “strong buy” from “buy,” citing a recovery in prices for computer chips known as dynamic random access memory, or DRAM.
-------Estimate raised
Samsung SDI Co., the world’s third-largest maker of rechargeable batteries, climbed 3.8 percent to 87,700 won after Prudential Investment & Securities Co. raised its price estimate on the stock by 22 percent.
Hon Hai Precision Industry Co., the world’s largest contract electronics manufacturer, gained 1.5 percent to NT$175.50. Sales in May climbed 21 percent to NT$103 billion ($3.4 billion)
Losses in China on Wednesday sent the CSI 300 Index to its lowest since April 2007. Tuesday's rout was the most since February 2007 after the People’s Bank of China ordered banks to set aside record reserves to curb credit growth and inflation.
China Merchants, the nation’s biggest dual-currency credit- card issuer, dropped 3.6 percent to 24.40 yuan, extending Tuesday's 10 percent plunge. Shanghai Pudong Development Bank Co., part owned by Citigroup Inc., lost 3.7 percent to 24.81 yuan. The shares also dropped 10 percent.
China’s producer-price inflation accelerated in May to the fastest pace in more than three years, the statistics bureau reported Wednesday. Factory-gate prices rose 8.2 percent from a year earlier, after gaining 8.1 percent in April.
------‘Overriding concern’
Meanwhile, producer-price inflation accelerated to 4.7 percent in May from 3.9 percent in April, the Bank of Japan said in Tokyo on Wednesday, signaling there may be more losses ahead for the nation’s businesses. The surplus shrank 30 percent to 1.38 trillion yen ($12.9 billion) in April from a year earlier, the Finance Ministry said.
“Inflation is the overriding concern in the market now and we are in the early stages of a decelerating global growth,” said Pearlyn Wong, an investment analyst at Bank Julius Baer & Co., which manages $350 billion in assets worldwide. “Investors are shifting part of their holdings away from risky assets into those that can protect them against inflation.”
In Australia, record oil prices and accelerating inflation sent consumer confidence to 84.7 in June, the lowest level in almost 16 years.
David Jones Ltd., Australia’s second-largest department store chain, dropped 2.7 percent to A$3.23. Harvey Norman Holdings Ltd., the nation’s biggest furniture and electronics retailer, slipped 2.7 percent to A$3.26.
In Hong Kong, Citic International Financial Holdings Ltd. surged 9.3 percent to HK$6.23, the largest rally on MSCI's Asian index. Citic Group, China’s biggest state-owned investment company offered HK$12.3 billion ($1.57 billion) to take the unit private.