Bloomberg News

Japan Stock Futures Gain as Yen Weakens; Australia Equities Rise

January 09, 2013

Japanese stock futures rose, with the Nikkei 225 (NKY) Stock Average poised to climb for a second day, as the yen weakened, boosting the outlook for the nation’s exporters. Australian equities advanced.

American Depositary Receipts of Nissan Motor Co., a Japanese carmaker that gets almost 80 percent of its sales overseas, gained 1.4 percent. Shares of Mazda Motor Corp. may rise after Bank of America Corp. advised buying the shares. Izutsuya Co. may be active after the department-store operator raised its profit forecast.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,630 in Chicago yesterday, up from 10,570 at the close in Osaka, Japan. They were bid in the pre-market at 10,630 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.2 percent and New Zealand’s NZX 50 Index rose 0.2 percent.

“The Japanese government’s economic policy can prompt a sustained improvement in investor sentiment by weakening the yen before the recovery in the U.S. economy becomes definite,” said Naoki Kamiyama, an equity strategist at Bank of America Corp. in Tokyo. “It is a way to engineer an economic recovery by weakening the yen to improve business confidence and create a greater willingness to invest.”

The Nikkei 225 surged 22 percent though yesterday from Nov. 14, when Japanese elections were announced, on expectations Prime Minister Shinzo Abe’s new government would call for more stimulus. The yen tumbled in the past three months, boosting the earnings outlook for Japanese companies that repatriate profits back to Japan. The yen weakened today to 88.05 per dollar.

Inflation Target

Abe has said ending deflation, which weighs on growth by dissuading consumer spending, is the most urgent issue for his nation along with currency strength that hurts exporters. He’s aiming to establish a policy accord with the Bank of Japan to set a 2 percent target for annual consumer price gains, twice the central bank’s current goal. The BOJ will consider further monetary easing at its Jan. 21-22 meeting, the Asahi newspaper reported, without saying where it got the information.

The MSCI Asia Pacific Index, the regional benchmark, climbed 14 percent in 2012 as central banks from the U.S., Europe, Japan and China took action to spur economic growth. The gauge traded at 14 times estimated earnings, compared with 13.2 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 Index were little changed today. The gauge yesterday advanced 0.3 percent amid investors’ optimism about fourth-quarter corporate earnings.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. rose 1.2 percent to 100.77 yesterday in New York.

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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