Bloomberg News

Japanese Stock Futures Edge Higher on Draghi Bond Buying

September 04, 2012

Japanese stock futures edged up after European Central Bank President Mario Draghi bolstered his case for bond purchases to tame the region’s debt crisis. Australian equity futures fell as oil dropped after a report showed U.S. manufacturing contracted for a third month.

American depositary receipts of Kyocera Corp. (6971), which gets almost 17 percent of its revenue in Europe, gained 0.4 percent from the closing share price in Tokyo. ADRs of Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, slid 0.4 percent. Those of Toyota Motor Corp. (7203), Asia’s No. 1 carmaker by market value, rose 0.2 percent after sales of its Lexus luxury brand increased 34 percent last month.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in September closed at 8,795 in Chicago yesterday compared with 8,780 in Osaka, Japan. They were bid in the pre-market at 8,790 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 added less than 0.1 percent in Wellington.

“The big theme at the moment is clearly the ECB meeting this week and what the ECB is going to do in terms of its bond- purchase program,” said Cameron Peacock, a Melbourne-based market analyst at IG Markets, a provider of trading services for stocks, bonds and currencies. “At the very least, people are expecting (Draghi) to outline a basic framework for the bond- purchase program.”

Stimulus, Slowdown

The MSCI Asia Pacific Index (MXAP) was little changed this quarter through yesterday as expectations for further stimulus measures overshadowed signs of a global economic slowdown. The Asian benchmark traded at 12.3 times estimated earnings as of last week, compared with 13.6 times for the Standard & Poor’s 500 Index (SPXL1) and 11.6 times for the Stoxx Europe 600 Index.

Draghi said the ECB’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival. His comments came before the ECB’s Governing Council is due to decide on his bond-buying proposal tomorrow.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The index declined 0.1 percent in New York yesterday. The Institute for Supply Management’s U.S. factory index showed U.S. manufacturing shrank for a third month in August in the longest decline since the recession ended in 2009.

Oil for October delivery decreased $1.17 to settle at $95.30 a barrel on the New York Mercantile Exchange.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. dropped 0.9 percent to 87.14 in New York yesterday, the lowest level since Aug. 2.

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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