Japanese Stock Futures Gain on U.S. Confidence, Spending

Japanese stocks declined a third day after falling demand for Spanish bonds refocused attention on Europe’s debt crisis. Shares pared losses after a nominee to the Bank of Japan was rejected as lawmakers press for a candidate more supportive of aggressive easing.

Nissan Motor Co. (7201), a carmaker that gets almost a fifth of its revenue from Europe, lost 1 percent after paring losses of as much as 3.2 percent. Inpex Corp. (1605), Japan’s top energy explorer by market value, sank 1.3 percent after crude prices declined. Gulliver International Co. dropped 2.5 percent after the used- car seller said profit will fall.

The Nikkei 225 Stock Average (NKY) fell 0.5 percent to 9,767.61 at the 3 p.m. close in Tokyo, extending losses after yesterday plunging by the most since Nov. 10. The gauge pared earlier losses of as much as 1.3 percent. The broader Topix (TPX) Index lost 0.3 percent to 832.57, with twice as many shares declining as advancing.

“The fact that investors were so unenthusiastic about Spain’s auction reminded people that Europe has made very little real progress in solving its debt problems,” said Hisakazu Amano, who helps oversee the equivalent of $24 billion at T&D Asset Management Co. in Tokyo.

Futures on the Standard & Poor’s 500 Index (SPXL1) added 0.3 percent today. The gauge sank 1 percent in New York yesterday, this year’s second-biggest decline, as a measure of U.S. service industries dropped.

Spain struggled to borrow in financial markets, selling 2.6 billion euros ($3.4 billion) of bonds at an auction. The amount was near the bottom of a range set for the sale, raising concern that Europe is still struggling to contain its debt crisis.

“Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves,” Spanish Prime Minister Mariano Rajoy said as he seeks to push through the deepest budget cuts in three decades.

Exporters Fall

Nissan, Japan’s second-largest carmaker by revenue, lost 1 percent to 869 yen. Ricoh Co., an office-equipment and camera maker that gets more than a fifth of its sales in Europe, slipped 1.4 percent to 792 yen.

The euro depreciated to as low as 107.91 against the yen last night in Tokyo, compared with 109.04 yen at the close of stock trading yesterday. The dollar also weakened to 82.10 yen from 82.62 yen, cutting the value of some overseas income at Japanese companies when repatriated.

Stocks pared after BNP Paribas SA economist Ryutaro Kono, Prime Minister Yoshihiko Noda’s nominee to the Bank of Japan board, was blocked by a vote in the upper house of parliament.

‘Negative on Easing’

“People in the market think it would be best to have a monetarist in that position,” said Ichiro Takamatsu, a fund manager who helps oversee $2 billion at Tokyo-based Bayview Asset Management Co. Kono “was negative on BOJ’s monetary easing stance.”

The Topix (TPX) has risen about 5.8 percent since Feb. 14, when the Bank of Japan increased its government-bond purchases, weakening the yen. The gain has boosted the value of stocks listed on the gauge to 1.02 times book value, up from 0.88 in December, according to data compiled by Bloomberg. A number below one means companies can be bought for less than value of their assets.

Commodity prices declined, with crude for May delivery sinking 2.4 percent to $101.47 a barrel in New York yesterday, the lowest since Feb. 14. The London Metal Exchange Index of prices for six industrial commodities including copper and aluminum dropped 2.7 percent to the lowest level since Jan. 16.

Energy Stocks Decline

Inpex slid 1.3 percent to 543,000 yen. Japan Petroleum Exploration Co., the nation’s second-largest oil explorer by market value, lost 1.2 percent to 3,705 yen. Sumitomo Metal Mining Co., a producer of copper and other non-ferrous metals, fell 1.2 percent to 1,115 yen.

Gulliver (7599) sank 2.5 percent to 3,145 yen after the used-car retailer said it expects a 26 percent drop in net income to 2.8 billion yen ($34 million) in the year through February 2013, citing uncertainty about vehicle auction markets.

Among stocks that rose, Showa Denko K.K. gained the most in the Nikkei 225, rising 3.8 percent to 190 yen. The company will supply hard disks to Seagate Technology Plc, according to the Nikkei newspaper.

Tokyo Electric Power Co. climbed 1.9 percent to 210 yen after the Nikkei reported the government will buy a majority stake in the owner of the crippled Fukushima Dai-Ichi nuclear power plant.

-- With assistance from Masaaki Iwamoto in Tokyo. Editors: Jim Powell, Jason Clenfield

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

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

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