Bloomberg News

Japanese Stock Futures Climb Amid Stimulus Speculation

June 04, 2012

Japanese and Australian stock futures climbed amid speculation global policy makers will take steps to stimulate economic growth and after a four-day drop left the regional gauge at the cheapest level this year.

American depositary receipts of BHP Billiton Ltd. (BHP), the world’s largest mining company, rose 1.8 percent from the closing share price in Sydney as commodity prices advanced. ADRs of Canon Inc. (7751), a Japanese camera maker whose shares fell to the lowest level since April 2009, gained 4.1 percent. Japan Tobacco Inc. (2914), Asia’s largest cigarette maker, may climb after Deutsche Bank AG advised buying the shares.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 8,335 in Chicago yesterday, up from 8,290 in Osaka, Japan. They were bid in the pre-market at 8,330 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index advanced 0.5 percent. Reserve Bank of Australia Governor Glenn Stevens may cut the overnight cash-rate target today by half a quarter percentage point to 3.25 percent, swap markets show. New Zealand’s NZX 50 Index slid 0.7 percent in Wellington.

“We are likely to see a reasonably strong policy response in a number of countries,” said Angus Gluskie, managing director at White Funds Management in Sydney, who manages more than $350 million. “It’s stacking up to be a reasonably good buying opportunity.”

U.S. Federal Reserve Chairman Ben S. Bernanke may respond to weakness in the job market by announcing further steps to stimulate growth, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

Europe, China

The European Central Bank may cut its benchmark interest rate from 1 percent as soon as this week, Holger Schmieding, chief economist at Berenberg Bank in London, said in a June 1 report. China will respond with a 2 trillion yuan ($314 billion) fiscal stimulus this year and next, according to Donald Straszheim, senior managing director of New York-based ISI Group.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The index advanced less than 0.1 percent in New York yesterday, reversing earlier losses.

The MSCI Asia-Pacific Index (MXAP) has fallen 15 percent from its peak this year on Feb. 29. The measure slumped 10 percent in May, the biggest monthly loss since October 2008, when global markets tumbled following the collapse of Lehman Brother Holdings Inc. Equities continued declines into June as a U.S. jobs report added to concern global growth is slowing amid a deepening debt crisis in Europe.

Valuations Slump

The MSCI Asia-Pacific has fallen 4.2 percent this year through yesterday, compared with a 4.4 percent drop on the Stoxx Europe 600 Index and a 1.6 percent gain on the S&P 500. Declines in regional equity markets dragged down valuations on the Asian benchmark to 11.2 times estimated earnings on average, the lowest this year. That compares with 12.2 times for the S&P 500 and 9.7 times for the Stoxx 600.

Japan’s Topix Index entered a bear market yesterday, with stocks plunging to a level not seen since 1983 as Europe’s debt crisis spurs a global flight from risk assets, driving up the yen, which reduces the value of export earnings when repatriated.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. fell 0.6 percent to 86.71 yesterday in New York, after tumbling 16 percent in the last five weeks.

The Thomson Reuters/Jefferies CRB Index of raw materials climbed 0.6 percent.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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


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