Bloomberg News

Japan Futures Rise on U.S. Earnings, Spain

April 11, 2012

Japanese stock futures rose after the Nikkei 225 Stock Average (NKY) yesterday capped the longest losing streak since 2009 as optimism about U.S. corporate earnings and a drop in Spanish bond yields boosted demand for riskier assets. Australian stock futures gained.

American depositary receipts of Toyota Corp., Asia’s biggest carmaker that generates 28 percent of its sales in North America, rose 0.5 percent from the closing share price in Tokyo after Alcoa Inc., the largest U.S. aluminum producer, reported an unexpected first-quarter profit. Those of electronics maker Kyocera Corp., which gets 17 percent of its revenue in Europe, gained 0.7 percent. ADRs of Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, climbed 0.6 percent after crude prices gained.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 9,500 in Chicago yesterday, up from 9,440 in Osaka, Japan. They were bid in the pre-market at 9,510 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index added 0.1 percent today. New Zealand’s NZX 50 Index rose 0.5 percent in Wellington.

“Today we will see a little bit of rebound after five or so days of negative market activity, but there are significant headwinds on the horizon,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Overall, clearly the U.S. economy is improving. The question is whether we are reading too much into a better-than- expected Alcoa result.”

Beige Book

Futures on the Standard & Poor’s 500 Index (SPXL1) gained 0.2 percent today. The index rose 0.7 percent in New York yesterday after Alcoa kicked off the earnings seasons with a positive tone. The Federal Reserve’s Beige Book business survey showed the economy maintained its expansion in all 12 of its regions as manufacturing, hiring and retail sales showed signs of strength in the face of higher fuel prices.

Stocks also rose after Spanish debt yields retreated from this year’s high, while European Central Bank board member Benoit Coeure spurred speculation the central bank will help reduce Spain’s borrowing costs.

Crude oil for May delivery rose $1.68 to settle at $102.70 a barrel on the New York Mercantile Exchange. Prices are up 3.9 percent this year.

The MSCI Asia Pacific Index (MXAP) gained 8.1 percent this year through yesterday, compared with an 8.8 percent advance by the S&P 500 and a 4 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.6 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 10.5 times for the Stoxx 600.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. added 1.8 percent to 101.22 yesterday in New York yesterday, the biggest advance since March 13.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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


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