Bloomberg News

Japan, Australian Stock Futures Drop on U.S. Economic Slowdown

June 08, 2011

June 9 (Bloomberg) -- Japanese and Australian stock futures fell after the Federal Reserve said the economy is slowing in some areas of the U.S., boosting concern about the global recovery.

American depositary receipts of Canon Inc., the world’s biggest camera maker, lost 0.7 percent from the closing price in Tokyo. Toyota Motor Corp., an automaker that earns about 70 percent of its revenue abroad, slid 0.7 percent after the yen strengthened, cutting the earnings outlook for the exporter. ADRs of Australia and New Zealand Banking Group Ltd., Australia’s third-largest lender by market value, dropped 0.9 percent.

“The U.S. economy has so far been bolstered by manufacturers, as consumption, employment and housing were not good. But people have begun to see a dark cloud over the manufacturing industry,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 9,385 in Chicago yesterday, compared with 9,460 in Osaka, Japan. They were bid in the pre-market at 9,410 in Osaka, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index dropped 0.4 percent today.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. In New York yesterday, the index fell 0.4 percent, sending the gauge to its longest losing streak since February 2009, as raw-material and financial shares slumped amid growing concern the economy is slowing.

Yen Rises

The Federal Reserve yesterday said the economy expanded at a “steady pace” in most of the U.S., while it weakened in four of 12 regions as consumers contended with higher food and fuel prices and shortages of parts reduced auto production.

The yen strengthened against all of its 16 most-traded counterparts as concern about slower U.S. growth and about how European leaders will deal with the region’s debt crisis boosted demand for refuge currencies.

The Japanese currency appreciated to as high as 79.70 against the dollar last night in Tokyo, the strongest level since May 5. Against the euro, the yen rose to 116.30 today from 117.44 at the close of stock trading yesterday. A stronger yen cuts the value of overseas earnings at Japanese companies when repatriated.

Copper Falls

ADRs of BHP Billiton Ltd., Australia’s No. 1 oil producer, declined 0.5 percent after copper yesterday fell by the most in a week on concern that demand will wane as the U.S. economy falters. The London Metal Exchange Index of prices for six metals including copper and aluminum retreated 0.7 percent yesterday, its first drop in four days.

The MSCI Asia Pacific Index slid 3.3 percent this year through yesterday, compared with a gain of 1.7 percent by the S&P 500 and a drop of 2.5 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.4 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.9 times for the Stoxx 600.

In Japan, the government is scheduled to release the nation’s first-quarter gross domestic product report at 8:50 a.m. local time in Tokyo.

--Editors: John McCluskey, Jason Clenfield.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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