Bloomberg News

Japanese Stock Futures Unchanged on Signs of Overheating, Yen

February 22, 2012

Feb. 23 (Bloomberg) -- Japanese stock futures were unchanged as technical indicators signaled shares have been overbought, while the yen’s drop to a seven-month low against the dollar buoyed the earnings outlook for exporters. Australian equities slipped.

American depositary receipts of Toyota Motor Corp., Asia’s No. 1 carmaker, advanced 0.1 percent from the closing share price in Tokyo. Shares of Mazda Motor Corp., Japan’s least profitable major carmaker, may be active as it plans to raise as much as 232.8 billion yen ($2.9 billion) after forecasting its largest annual loss in 11 years. Fairfax Media Ltd., Australia’s second-biggest newspaper publisher, fell 2.4 percent after reporting first-half profit slumped 42 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 9,570 in Chicago yesterday, unchanged from the level in Osaka, Japan. They were bid in the pre-market at 9,570 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index slipped 0.1 percent in early Sydney trading today. New Zealand’s NZX 50 Index gained 0.1 percent in Wellington.

“Stocks are likely to fluctuate around yesterday’s closing price as the yen’s weakness supports an overheating market,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “Should the yen fall further, carmakers may lead the market higher.”

Futures on the Standard & Poor’s 500 Index were little changed today. The index dropped 0.3 percent in New York yesterday as purchases of previously-owned homes rose to a 4.57 million annual rate, less than forecast, a report from the National Association of Realtors showed.

Yen Slips

The yen touched 80.40 per dollar yesterday, the lowest level since July 11. A weaker yen boosts the value of Japanese exporters’ earnings overseas.

The 14-day relative strength index for the Nikkei average rose to 79.5 yesterday, staying above the 70 threshold that some traders say signals stocks are overbought and may fall. The 25- day Toraku index, which compares the number of equities that have advanced with those that declined on the Tokyo Stock Exchange, rose to 141 yesterday. Investors view a reading above 120 as a sign shares may decline.

The MSCI Asia Pacific Index gained 12 percent this year through yesterday, compared with an 8 percent advance by the S&P 500 and an 8.2 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.7 times estimated earnings on average, compared with 13 times for the S&P 500 and 11 times for the Stoxx 600.

Chinese equities traded in the U.S. rebounded from a one- week low on speculation policy makers will cut interest rates to spur the economy. The Bloomberg China-US 55 Index of the most- traded Chinese shares in the U.S. rose for the first time in three days, adding 1 percent to 107.69 yesterday in New York.

Crude for April delivery added 3 cents to $106.28 a barrel on the New York Mercantile Exchange, the highest settlement since May 4. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum rose 0.3 percent yesterday.

--Editors: John McCluskey, Jason Clenfield

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

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


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