Bloomberg News

Japan Stock Futures Gain, Yen Weakens as Kuroda Promotes Easing

February 11, 2013

Japanese stock futures rose and the yen weakened after Haruhiko Kuroda, a potential contender for Bank of Japan chief, said additional monetary easing can be justified this year. Australian shares rose.

American Depositary Receipts of Canon Inc., Japan’s largest camera maker that gets 80 percent of sales abroad, gained 2.6 percent as the yen touched the lowest level since May 2010. ADRs of Nissan Motor Co. sank 3.5 percent after Japan’s second- biggest carmaker reported third-quarter profit that fell short of analyst estimates, with sales dropping in China. Amcom Telecommunications Ltd. gained 1.7 percent in Sydney after the fiber-optics carrier maintained its profit forecast.

Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 11,470 in Chicago yesterday, up from 11,170 at the most recent close in Osaka, Japan. They were bid in the pre- market at 11,390 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.3 percent and New Zealand’s NZX 50 Index rose 0.1 percent.

“If we do see a BOJ Governor of Kuroda’s calibre, the dollar-yen could well punch through 95 and would head to 100 very quickly,” said Evan Lucas, Melbourne-based market strategist at IG Markets Ltd., a provider of trading services. “It would also signal to Japanese consumers and investors alike that the government is finally taking action.”

Japan, Korea

Japan and South Korea equity markets reopen after yesterday’s holiday, while markets in China, Hong Kong, Taiwan, Singapore, Vietnam and Malaysia remain shut.

Gains in futures contracts indicate the Nikkei 225 Stock Average will recoup some of last week’s first decline in 13 weeks, which snapped its longest streak of weekly wins since 1959. The yen today weakened to 94.46 per dollar, its lowest level since May 2010.

The BOJ could usher in a growth spurt unseen in a generation by stepping up stimulus and ending deflation, according to Kuroda, head of the Asian Development Bank and a potential contender for BOJ chief. Kuroda, who said he was “satisfied” with his current job amid Prime Minister Shinzo Abe’s preparations for unveiling a nominee to succeed Masaaki Shirakawa, said that additional BOJ stimulus could be justified for 2013.

The BOJ last month said it would start open-ended asset purchases only in January 2014, and the board is forecast to keep its policy unchanged at a Feb. 13-14 gathering, according to a Bloomberg News survey of analysts.

U.S. Futures

Futures on the Standard & Poor’s 500 Index were little changed. The S&P 500 dropped 0.1 percent yesterday after a six- week rally left the gauge trading at its most expensive valuation since July 2011.

The S&P 500 has rallied 6.4 percent in 2013 to its highest level since November 2007 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated earnings. That’s more than double the MSCI Asia Pacific Index’s gain of 2.4 percent this year through yesterday.

The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.7 times average estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and a multiple of 12.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Of the 288 companies on the MSCI Asia Pacific index that have reported earnings so far this quarter and for which Bloomberg has estimates, 53 percent have exceeded profit expectations. Some 53 percent have missed sales projections. That compares with 74 percent of S&P 500 companies that topped profit forecasts during the period, while 33 percent fell short of sales estimates, data compiled by Bloomberg show.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 0.6 percent to 96.16 in New York yesterday.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net


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