Japanese, Australian Stock Futures Fall as Fitch Cuts Greece Debt Rating

Japanese and Australian stock futures fell as Fitch Ratings cut Greece’s credit rating three levels and the euro weakened, reducing the outlook for export earnings.

American depositary receipts of Canon Inc., the world’s largest manufacturer of cameras which counts Europe as its biggest market, lost 0.7 percent from the closing share price in Tokyo on March 20. Those of Nissan Motor Co., a carmaker which gets about 15 percent of its sales in Europe, declined 0.9 percent. American depositary receipts of BHP Billiton Ltd., the world’s No. 1 miner, dropped 0.5 percent.

Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in June closed at 9,530 in Chicago on May 20, compared with 9,620 in Osaka, Japan. They were bid in the pre-market at 9,540 in Osaka, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index lost 0.8 percent today. New Zealand’s NZX 50 Index slid 0.2 percent in Wellington.

“Greece’s debt restructuring is ready to start at any time,” Takero Inaizumi, head of equity research in Tokyo at Mizuho Investors Securities Co. “There’s concern that will affect exports negatively.”

Futures on the Standard & Poor’s 500 Index dropped 0.2 percent today. In New York, the index lost 0.8 percent to 1,333.27 on May 20 after Gap Inc. cut its earnings forecast and concern grew that Greece will default.

Fitch Ratings cut Greece three levels to B+, four steps below investment grade, from BB+. Fitch said even a “soft” restructuring of debt being studied by European Union policy makers would be considered a default. Fitch said Greece could face a further reduction in its creditworthiness.

The MSCI Asia Pacific Index lost 2.2 percent this year through May 20, compared with gains of 6 percent by the S&P 500 and 1.4 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13.4 times for the S&P 500 and 11.2 times for the Stoxx 600.

The yen appreciated to 115.27 against the euro, compared with 117.13 at the close of stock trading in Tokyo on May 20. A stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency.

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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