Bloomberg News

Japan Stock Futures Rise as Yen Weakens on Stimulus Bets

December 27, 2012

Japanese stock futures rose, signaling the Nikkei 225 Stock Average will gain for a fourth session on the last trading of the year, as the yen weakens amid calls from the new government for more central bank easing.

American Depositary Receipts of Canon Inc. (7751), the world’s biggest camera maker, gained 1.6 percent. Shares of Toshiba Corp. may be active after the manufacturer said it’s in talks to sell a stake in its Westinghouse Electric atomic-power unit. The Nikkei 225 yesterday climbed to its highest level since the day before the 2011 record earthquake, headed for its first annual gain in three years.

Futures on the benchmark expiring in March closed at 10,415 in Chicago yesterday, up from 10,350 in Osaka. They were bid in the pre-market at 10,390 in Osaka at 8:05 a.m. Australia’s S&P/ASX 200 Index gained 0.4 percent, while New Zealand’s NZX 50 Index fell 0.1 percent.

“Central banks are going to keep interest rates low and provide more stimulus that will keep equity markets propped up as it has done this year,” said Kumar Palghat, managing director and founder of Kapstream Capital, which oversees at least $5.2 billion. “There will be some resolution to the fiscal cliff talks.”

Standard & Poor’s 500 Index futures advanced 0.2 percent. The gauge slid 0.1 percent yesterday, paring losses in the final hour of trading as the House of Representatives planned a session on Dec. 30, fueling optimism lawmakers will reach a deal to avert the so-called fiscal cliff.

Fiscal Cliff

Unless a compromise is reached to cut the debt, more than $600 billion in automatic tax increases and spending cuts will come into effect started in January.

Goldman Sachs Asset Management Co. started adding to its holdings of Japanese banks and exporters in October in anticipation that a new government would do more to boost economic growth, according to Hiroyuki Ito, Tokyo-based head of equity investment at the unit.

The Nikkei 225 has jumped 19 percent since Nov. 14, when the former government said it would hold a general election. The gauge has risen the most among the world’s 10 largest markets this quarter. The Liberal Democratic Party took power in a Dec. 16 poll.

The yen today touched 86.64 per dollar, the weakest since Aug. 2010.

Japan’s consumer prices excluding fresh food fell 0.1 percent from a year earlier in November, the statistics bureau said today in Tokyo.

The MSCI Asia Pacific Index advanced 13 percent this year as the U.S. and Chinese economies showed signs of recovery and central banks around the world took action to shore up growth. The Asian benchmark trades at 14.8 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 12.7 for the Stoxx Europe 600 Index.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in New York dropped 0.1 percent to 96.87 yesterday.

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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