Bloomberg News

Japan Stock Futures Climb as Yen Falls on Stimulus Bets

January 10, 2013

Japanese stock futures rose, with the Nikkei 225 (NKY) Stock Average poised for a third day of gains, as the yen fell to the lowest level since 2010 amid speculation Prime Minister Shinzo Abe is set to announce more stimulus measures. Australian equities gained.

American Depositary Receipts of Nissan Motor Co. and Honda Motor Co., which both generate around 80 percent of their sales from overseas, climbed 2.1 percent and 1.9 percent respectively. Canon Inc., the world’s biggest camera maker, increased 2.3 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,775 in Chicago yesterday, up from 10,660 at the close in Osaka, Japan. They were bid in the pre-market at 10,790 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index rose 0.2 percent and New Zealand’s NZX 50 Index was little changed.

“There is significant scope for the equity market to outperform in 2013 if Abe’s promised reforms are undertaken,” said Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong. “A weaker yen would be beneficial for export-led sectors such as the automobile, electronics and machinery sectors.”

The yen slid to the weakest level since July 2010 against the dollar today after a Nikkei report quoted Abe as saying the central bank should include maximum employment among its goals.

Stimulus Measures

The government will announce around 12 trillion yen ($136 billion) in fiscal stimulus measures to boost the nation’s shrinking economy, Japanese media reported on Jan 7. Japan’s Economy Minister Akira Amari told reporters in Tokyo on Jan. 8 that the size of economic stimulus would be significant.

The Nikkei 225 has risen 23 percent from Nov. 14 when Japanese elections were announced, driving the measure into a bull market, on expectations Abe’s new government would call for more stimulus. The yen weakened today to 88.78 per dollar.

The MSCI Asia Pacific Index (MXAP) rose to a 17-month high yesterday as Chinese export data beat forecasts. The gauge capped seven straight weeks of gains last week as the U.S. Congress approved a budget deal.

Futures on the S&P 500 Index increased 0.2 percent today. The benchmark index for U.S. equities yesterday advanced to the highest level in five years, led by a rally in financial shares. The gauge traded at 14.1 times estimated earnings, compared with 13.3 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index, according to data compiled by

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. rose 1.7 percent to 102.47 yesterday in New York.

To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; 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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