Bloomberg News

Japanese, Australian Stock Futures Rise on Greece, U.S. Economy

June 19, 2011

June 20 (Bloomberg) -- Japanese and Australian stock futures rose on expectations European finance chiefs will reach agreement on an aid payment to Greece and after a report signaled U.S. economic growth may pick up by the end of this year.

American depositary receipts of Canon Inc., the world’s largest maker of cameras and which gets about 80 percent of its revenue outside Japan, increased 0.3 percent from the closing share price in Tokyo on June 17. Those of Toyota Motor Corp., the world’s largest carmaker, advanced 0.3 percent after Citigroup Inc. raised its rating on Japan’s auto sector to “neutral” from “bearish,” citing a recovery in production. ADRs of Westpac Banking Corp., an Australian lender, gained 0.8 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 9,365 in Chicago on June 17, compared with 9,340 in Osaka, Japan. They were bid in the pre-market at 9,360 in Osaka, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index gained 0.1 percent today. New Zealand’s NZX 50 Index increased 0.3 percent in Wellington.

“We are seeing a movement of support for Greece,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo. “People now probably expect it is unlikely Greece will have to restructure its debt because of a default.”

Euro-area finance ministers may authorize only a 6 billion- euro loan to tide Greece through bond redemptions in July, while further aid hinges on Greek budget cuts, Belgian Finance Minister Didier Reynders said ahead of a euro-area finance ministers’ meeting today to hammer out a new bailout package.

Financial Rescue

Futures on the Standard & Poor’s 500 Index slid 0.3 percent today. In New York, the index advanced 0.3 percent to 1,271.50 on June 17 as European leaders moved closer to a compromise on a financial rescue for Greece, and after an index of leading U.S. economic indicators advanced more than forecast.

Chancellor Angela Merkel retreated from German demands that bondholders be forced to shoulder a “substantial” share of a Greek rescue, saying she’ll work with the European Central Bank to avoid disrupting markets.

“We would like to have a participation of private creditors on a voluntary basis,” Merkel told reporters in Berlin on June 17 at a joint press conference with French President Nicolas Sarkozy. This “should be worked out jointly with the ECB and there shouldn’t be any dispute with the ECB on this.”

U.S. Outlook

An index of U.S. leading indicators rebounded in May after declining for the first time in almost a year, a sign economic growth may pick up by the end of 2011.

The Conference Board’s gauge of the outlook for the world’s biggest economy in the next three to six months rose 0.8 percent after a revised 0.4 percent decline in April, the New York-based group said on June 17. Economists forecast a 0.3 percent gain, according to the median estimate in a Bloomberg News survey.

The MSCI Asia Pacific Index lost 5.9 percent this year through June 17, compared with a gain of 1.1 percent by the S&P 500 and a drop of 3.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.2 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.8 times for the Stoxx 600.

--Editors: John McCluskey, Jason Clenfield.

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@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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