Bloomberg News

Japan Stock Futures, Australian Shares Advance on Stimulus Bets

April 04, 2013

Japanese stock futures and Australian equities rose as investors speculated that so-called quantitative easing measures from central banks across the world will stimulate economic growth.

American Depositary Receipts of Toyota Motor Corp., the world’s largest carmaker, soared 5.7 percent as the yen weakened against the dollar since the close of Japan’s equity markets yesterday. ADRs of Canon Inc., a camera maker that gets 80 percent of sales outside Japan, advanced 4.8 percent. BHP Billiton Ltd., the world’s biggest mining company, climbed 1.8 percent in Sydney, leading gains among firms with earnings closely tied to economic growth.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in June closed at 13,015 in Chicago yesterday, up from 12,720 at the close in Osaka, Japan. They were bid in the pre-market at 13,000 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index (AS51) advanced 0.2 percent and New Zealand’s NZX 50 Index fell 0.2 percent. Markets in Hong Kong reopen today while China and Taiwan remain closed for holidays.

“Now you have the Federal Reserve doing open-ended quantitative easing, the Bank of Japan doing QE until they get 2 percent inflation and European Central Bank President Mario Draghi using rhetoric as has his QE tool,” said Jack McIntyre, a Philadelphia-based fund manager who helps oversee $45 billion in assets for Brandywine Global Investment Management LLC. “This should help global growth.”

BOJ Stimulus

The Bank of Japan yesterday boosted its stimulus program, saying it will double the monetary base within two years. Draghi yesterday signaled the ECB will keep monetary policy loose for an extended period and that further easing is possible if economic conditions deteriorate. The Fed last month said it will continue buying U.S. securities at a rate of $85 billion per month, and will keep buying until the labor market improves “substantially.”

The MSCI Asia Pacific Index, the regional benchmark gauge, climbed the past five months as Japanese shares increased on speculation the nation will deploy more stimulus and amid signs the U.S. economy is recovering.

That left the gauge yesterday trading at 13.3 times average estimated earnings compared with 14.1 for the Standard & Poor’s 500 Index (SPX) and 12.5 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index were little changed. The gauge added 0.4 percent yesterday as central banks in Japan and Europe reassured investors that they will keep economies awash in cash to bolster growth.

A U.S. government report today is forecast to show a gain of 190,000 in U.S. payrolls last month, following a 236,000 advance in February, according to economists surveyed by Bloomberg. The jobless rate probably probably remained at 7.7 percent.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 0.2 percent 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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