Bloomberg News

Japan Futures Gain as Policy Bets Boost Growth

August 07, 2012

Japanese and Australian stock futures rose on speculation global central banks will take steps to boost economic growth. The yen weakened against the dollar and euro, lifting earnings outlooks for exporters.

American Depositary Receipts of Honda Motor Co. (7267), a Japanese carmaker that gets about 80 percent of its sales abroad, rose 1.5 percent from the Tokyo close. Shares of Bridgestone Corp., the world’s biggest tiremaker, may be active after raising annual earnings projections. ADRs of BHP Billiton Ltd. (BHP), Australia’s top oil producer and the world’s No. 1 mining company by market value, rose 0.8 percent after commodity prices increased.

Japan’s Nikkei 225 Stock Average futures expiring in September closed at 8,880 in Chicago yesterday, up from 8,800 in Osaka, Japan. They were bid in pre-market trading at 8,890 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index futures rose 0.5 percent today. New Zealand’s NZX 50 Index added 0.1 percent in Wellington.

“There’s expectations that global easing policies may help stem the economic slowdown,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The recovery in U.S. business conditions will bring benefits for the Asian economy. Investors are becoming less likely to avoid risky assets because of strong expectations Europe will overcome the crisis.”

S&P Futures

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge rose 0.5 percent yesterday amid better- than-expected U.S. corporate earnings. More than 70 percent of the S&P 500 (SPX) companies which reported second-quarter results beat earnings estimates, Bloomberg data show.

Federal Reserve Bank of Boston President Eric Rosengren said the central bank should pursue an “open-ended” easing program of “substantial magnitude.”

The yen weakened to as low as 78.74 against the dollar today in Tokyo, compared with 78.28 at the close of stock trading yesterday. Against the euro, Japan’s currency also weakened to 97.82 from 96.98 amid speculation that the European Central Bank is taking appropriate measures to quell the region’s debt crisis. A weaker yen boosts overseas income at Japanese companies when repatriated.

The Bank of Japan is scheduled to start a two-day policy meeting today.

Crude Rises

Crude oil for September delivery climbed 1.6 percent to $93.67 in New York yesterday, the highest settlement since May 15. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum yesterday gained 1.2 percent to the highest since July 19.

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S yesterday rose 1.6 percent to the highest level since July 5 in New York. Mindray Medical International Ltd. led a rally in the benchmark the country’s biggest medical- device supplier raised its 2012 outlook.

The MSCI Asia Pacific Index (MXAP) fell 7.3 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen and China’s economy is slowing. The regional benchmark index traded at 12.3 times estimated earnings, compared with 13.6 for the Standard & Poor’s 500 Index (SPXL1) and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Of the 1,008 companies listed on the Asian benchmark gauge, 161 firms are scheduled to post earnings this week, according to data compiled by Bloomberg. Of the 341 companies to have reported since July 1 that have issued forecasts, 45 percent have exceeded expectations, according to Bloomberg data.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

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


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