Japanese Stock Futures Advance on Bernanke, German Confidence

Japanese stock futures and Australian equities rose after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed and a report showed German business confidence unexpectedly gained, improving the earnings outlook for Asian exporters.

American depositary receipts of Honda Motor Co. (7267), Japan’s second-largest carmaker by market value that gets 83 percent of its sales abroad, rose 0.9 percent from the closing share price in Tokyo. ADRs of Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender by market value, added 2.4 percent after German Chancellor Angela Merkel signaled she stands ready to do more to tame Europe’s debt crisis. Australian mining company Rio Tinto Group (RIO) climbed 0.7 percent after it finished a $7 billion share buy-back program and metal prices rose.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in June closed at 10,050 in Chicago yesterday, up from 9,960 in Osaka, Japan. They were bid in the pre-market at 10,050 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.9 percent today. New Zealand’s NZX 50 Index advanced 0.4 percent in Wellington.

Fed policy makers “still have an option of doing more, but I think it was just reinforcing the view that they are not going to reverse policy quickly,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “There’s going to be a lot of liquidity provided for the market and economy. Obviously equity investors are taking it in a positive way.”

Bernanke Comments

Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today. The index added 1.4 percent in New York yesterday to close at the highest level since May 2008 after Bernanke said that while he is encouraged by a drop in the unemployment rate, the Fed needs to continue accommodative monetary policy to make further progress.

Chinese equities traded in the U.S. advanced for a second day on prospects further U.S. monetary policy easing will spur demand for goods from the world’s biggest exporter. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. climbed 1.1 percent to a nine-day high of 105.70 yesterday in New York.

The Stoxx Europe 600 Index climbed 0.9 percent as the Munich-based Ifo institute said its German business climate index, based on a survey of 7,000 executives, increased to 109.8 from a revised 109.7 in February. Economists forecast it would remain unchanged at the initial February reading of 109.6, according to the median of estimates in a Bloomberg News survey.

Debt-Crisis Firewall

Separately, German Chancellor Merkel gave her first indication that she is prepared to allow an increase in the debt-crisis firewall, saying that Germany could let the temporary and permanent rescue funds run in parallel.

The MSCI Asia Pacific Index (MXAP) gained 10.4 percent this year through yesterday, compared with a 12.6 percent gain by the S&P 500 and a 9.6 percent advance by the Stoxx 600 Index. Stocks in the Asian benchmark are valued at 14.8 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.2 times for the Stoxx 600.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum rose 1.3 percent yesterday.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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