Bloomberg News

Japan Stock Futures Fall as Yen Rises Ahead of BOJ Review

July 10, 2012

Japanese stock futures fell after the yen rose to a five-week high against the euro as the Bank of Japan starts a two-day policy meeting today, damping the earnings outlook for exporters. Australian futures declined after oil dropped, sapping demand for growth-sensitive shares.

American depositary receipts of Canon Inc. (7751), a camera maker that gets 31 percent of its revenue in Europe, slid 0.6 percent from the closing share price in Tokyo. Those of Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, sank 0.6 percent. Shares of Saizeriya Co., which operates a restaurant chain, may be active in Tokyo after cutting its operating profit forecast.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in September closed at 8,835 in Chicago yesterday, down from 8,860 in Osaka, Japan. They were bid in the pre-market at 8,850 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index slid 0.5 percent today. New Zealand’s NZX 50 Index dropped 0.2 percent in Wellington.

“A stronger yen weighs on exporters and falling oil prices may push raw-material shares lower,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Meanwhile, expectations for global monetary easing gives the market a floor. As the BOJ starts meeting today, some expect it to ease its policy further and boost asset purchases.”

Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today after the index lost 0.8 percent in New York yesterday, falling for a fourth day in the longest losing streak since May.

Yen, BOJ

The yen touched 97.23 per euro yesterday, the highest level since June 5. A stronger yen cuts the value of exporters’ overseas earnings when repatriated and weighs on Japan’s export- driven economy.

Ten of 17 analysts surveyed by Bloomberg News expect no change to monetary policy at the end of the BOJ meeting tomorrow. Nomura Securities Co. and Tokai Tokyo Securities Co. see possible increased purchases of riskier assets including exchange-traded funds.

Crude oil for August delivery declined $2.08 to settle at $83.91 a barrel on the New York Mercantile Exchange.

The MSCI Asia Pacific Index (MXAP) gained 2.4 percent this year through yesterday, compared with a 6.7 percent advance by the S&P 500 and a 4.5 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 12.9 times for the S&P 500 and 10.7 times for the Stoxx 600.

Chinese equities traded in the U.S. posted the longest losing streak in a month after slower-than-estimated imports added to evidence that the world’s second-largest economy is flagging. The Bloomberg China-US Equity Index of the most-traded Chinese companies in New York fell for a third day, dropping 1.8 percent to 87.97 yesterday.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.

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


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