Bloomberg News

Japan Stock Futures Fall on Euro Summit Skepticism

June 28, 2012

Japanese and Australian stock futures fell and the euro weakened on skepticism that European Union leaders will make progress on the region’s debt crisis.

American depositary receipts of Honda Motor Co. (7267), a Japanese carmaker that gets more than 80 percent of its sales overseas, fell 0.8 percent from the closing share price in Tokyo after reports showed unemployment rising in the U.S. and Germany. Those of Nomura Holdings Inc. lost 1.3 percent on a report the brokerage will suspend some marketing activity. ADRs of Woodside Petroleum Ltd., Australia’s No. 2 oil company, slid 0.4 percent after crude prices fell to an eight-month low.

Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 8,835 in Chicago yesterday, down from 8,870 in Osaka, Japan. They were bid in the pre-market at 8,830 in Osaka at 8:05 a.m. Futures on Australia’s S&P/ASX 200 Index lost 0.2 percent today. New Zealand’s NZX 50 Index fell 0.2 percent in Wellington.

“Investors are waiting for the results of the European Summit meeting and are reluctant to buy shares,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “There have been no surprises from the EU meeting so far.”

European stocks retreated after Spanish 10-year bond yields surged and a report showed Germany’s unemployment rate rose more than forecast as a two-day summit of the region’s leaders started in Brussels. Spanish bonds declined for the fourth day, sending the yield on benchmark 10-year securities to about 7 percent yesterday.

Euro Slides

The euro weakened to as low as 98.69 yen in Tokyo today, compared with 99.42 yen at the close of stock trading yesterday, cutting the value of some overseas income at Japanese companies when repatriated.

In the U.S., applications for jobless benefits hovered last week near the highest level of the year.

Futures on the Standard & Poor’s 500 Index slid 0.3 percent today. The gauge fell 0.2 percent in New York yesterday, paring losses in the final hour of trading amid speculation European leaders were nearing an agreement to halt contagion from the debt crisis. After the market closed, European Union President Herman Van Rompuy said leaders agreed to spend 120 billion euros ($149 billion) to stimulate growth.

Crude oil for August delivery sank 3.1 percent to $77.69 a barrel in New York yesterday, the lowest settlement since October. The London Metal Exchange Index fell 0.4 percent.

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S fell 1.5 percent in New York yesterday.

The MSCI Asia Pacific Index (MXAP) rose 0.9 percent this year through yesterday, compared with a 5.7 percent advance by the S&P 500 and a 0.1 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.8 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.3 times for the Stoxx 600.

In Japan, the government is scheduled to release reports on consumer prices at 8:30 a.m. in Tokyo and industrial productions at 8:50 a.m.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@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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