Bloomberg News

Japanese Futures Fall on U.S. Data, Spain

May 31, 2012

Japanese and Australian stock futures fell after U.S. economic data missed estimates ahead of an employment report today and as Spain denied it is in talks about a bailout as its bond yields near a level that prompted rescues in other nations.

American depositary receipts of Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that gets 38 percent of its sales in the U.S. and Europe, fell 1.2 percent from the closing share price in Tokyo. Those of Komatsu Ltd. (6301), Japan’s largest construction machinery maker that depends on China for 14 percent of its revenue, slid 1.8 percent before the release of China’s manufacturing data today. ADRs of BHP Billiton Ltd. (BHP), Australia’s biggest mining company and oil producer, lost 1.1 percent after metal and oil prices dropped.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring this month closed at 8,485 in Chicago yesterday, down from 8,530 in Osaka, Japan. They were bid in the pre-market at 8,480 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index fell 0.3 percent today. New Zealand’s NZX 50 Index declined 0.2 percent in Wellington.

“The U.S. payroll report is going to be important obviously on the day, but the big issue is how Europe is going to play out,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. “Spanish bond yields are about 6.5 percent and that tells you something that can’t be ignored. While Spanish yields are that high, you have to have a fairly cautious attitude toward adding risk to your portfolio right now.”

U.S. Data

Futures on the Standard & Poor’s 500 Index (SPXL1) slid 0.2 percent today. The index fell 0.2 percent in New York yesterday, when data showed the U.S. economy grew more slowly in the first quarter than previously estimated and business activity expanded in May at the slowest pace since September 2009. The number of Americans applying for unemployment benefits rose. A Labor Department report due today is projected to show nonfarm payrolls gained by 150,000 workers in May while the unemployment rate held at 8.1 percent.

The International Monetary Fund said it is not preparing financial aid for Spain and the country denied it is in talks about a bailout. The nation’s 10-year debt yields were 6.56 percent, near the 7 percent level that prompted bailouts in Greece, Ireland and Portugal.

The MSCI Asia Pacific Index (MXAP) declined 10 percent in May, the biggest monthly loss since October 2009, while the S&P 500 fell 6.3 percent and the Stoxx Europe 600 Index lost 6.8 percent. Stocks in the Asian benchmark were valued at 11.5 times estimated earnings on average through yesterday, compared with 12.5 times for the S&P 500 and 9.9 times for the Stoxx 600.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. fell 0.7 percent to 90.28 in New York yesterday.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.7 percent. Crude for July delivery declined $1.29 to $86.53 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 20.

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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