Asian stocks rose, led by Japanese exporters and commodity producers. The MSCI Asia Pacific Index rose 0.2 percent at 116.46 as of 1:03 p.m. in Tokyo, extending a two-day, 2.6 percent rally.

The fall of the yen was on the back of the Liberal Democratic Party of Japan's gaining 51 seats on July 11's elections as compared to the Democratic Party of Japan's 44 seats in the upper house in yesterday's elections. Analysts fear that this would make it less likely that Prime Minister Naoto Kan will be able to raise the sales tax to cut the world's largest public debt.

"Earnings are the key but it's going to be very company specific," Curtis Freeze, chairman of Honolulu-based Prospect Asset Management Inc. with about $1 billion in assets, said in a Bloomberg Television interview. "The yen could actually weaken because there's going to continued spending by the government and there's going to be a delay in the consumption tax hike."

Commodity stocks post gains

Commodity-related stocks rallied, with Rio Tinto Group rising 1.4 percent and Nippon Steel Corp., Japan's largest steelmaker, surging 3.3 percent.

Material producers and banks have fallen the most this year among the MSCI Asia Pacific Index's 10 industry groups on concern Europe's debt crisis would lead to slowing economic growth and reduce demand for commodities.