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Japanese, Australia Stock Futures Fall on Recovery Concerns; BHP Retreats
Japanese and Australian stock futures fell as the yen strengthened and amid speculation U.S. gross domestic product will be revised lower.
American depositary receipts of Canon Inc., the world’s largest maker of cameras that gets about 80 percent of its revenue outside Japan, slumped 1.4 percent from the closing share price in Tokyo. Those of Toyota Motor Corp., the world’s largest carmaker, lost 1 percent. ADRs of BHP Billiton Ltd., the world’s largest mining company, sank 0.6 percent on concern demand for commodities may decline in a slowing economy.
“The outflow of funds from Japanese stocks will unlikely stop as worries that the yen’s appreciation against the dollar accelerate amid concerns the global economy will slow down faster than expected,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
Revisions of second-quarter growth in the U.S. will be announced today and may lower last quarter’s 2.4 percent annual growth rate by 1 percentage point or more, according to Morgan Stanley’s David Greenlaw and Nomura Securities International Inc.’s David Resler.
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 8,835 in Chicago yesterday, compared with 8,875 in Singapore. They were bid in the pre-market at 8,830 in Osaka, Japan, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index retreated 0.8 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.
New York Market
Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. In New York, the index dropped 0.8 percent to 1,047.22 yesterday, the lowest close since July 6, as a court ruled Spain’s method of auditing sales tax was illegal and the Federal Reserve Bank of Kansas City said manufacturing growth stalled in the region. Stocks earlier gained after a drop in jobless claims.
El Economista reported that a Spanish court voided 5.1 billion euros ($6.5 billion) in value-added tax collected in past years, spurring concern that the ruling may worsen the European debt crisis.
The Kansas City Fed said yesterday manufacturing slowed in August, with no companies reporting month-over-month increases.
Applications for jobless benefits in the U.S. fell by 31,000, more than forecast, last week, Labor Department figures showed yesterday in Washington. Claims dropped to 473,000, compared with a median estimate of 490,000 by economists surveyed by Bloomberg.
Valuations, Yen
The MSCI Asia Pacific Index has declined 3.3 percent in 2010, compared with drops of 6.1 percent by the S&P 500 and 1.7 percent the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings, compared with 12.6 times for the S&P and 11.2 times for the Stoxx.
The yen appreciated to 84.32, compared with 84.78 against the dollar at the close of stock trading in Tokyo yesterday. Against the euro, Japan’s currency strengthened to 107.15 from 107.78. The stronger yen reduces income at Japanese companies when overseas revenue is converted into local currency.
Japan’s large manufacturers expect the yen to average 90.16 in the year ending March 2011, according to Bank of Japan’s Tankan survey released on July 1.
Fed Chairman Ben S. Bernanke will discuss the outlook for the economy tomorrow at the central bank’s annual symposium in Jackson Hole, Wyoming.
“We may see investors who wait for tonight’s Bernanke’s comment pull back on trading stocks,” said Nomura’s Wako.
Japan’s statistics bureau said today that the July jobless rate was 5.2 percent, lower than June’s 5.3 percent.
To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.
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