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

Japanese stocks declined, sending the Nikkei 225 (NKY) Stock Average to its biggest weekly loss since August, as rising bond yields in Europe fueled concern the debt crisis has yet to be contained, outweighing improvement in the U.S. jobs market.

Sony Corp. (6758), which depends on Europe for more than a fifth of its sales, lost 2 percent after the euro weakened against the yen, damping the outlook for exporters. Kobe Steel Ltd., Japan’s fourth-largest producer of the material, sank 3.1 percent after posting a loss that was twice as big as forecast. NSK Ltd. (6471) slid 3.4 percent after the bearing maker’s rating was cut by Mito Securities Co.

The Nikkei 225 fell 0.8 percent to 9,688.45 at the 3 p.m. close in Tokyo, dropping 3.9 percent on the week. Volume on the gauge was more than 25 percent below the 30-day average. The broader Topix Index lost 0.8 percent to 825.71, with about three shares dropping for every two that gained.

“Investors are getting cautious again about European debt issues,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. “The debt problem is weakening the euro against the yen, weighing on the markets.”

Futures on the Standard & Poor’s 500 Index (SPXL1) added 0.2 percent today. The gauge slipped 0.1 percent in New York yesterday after Spanish yields rose to their highest compared with German debt this year. The S&P 500 trimmed losses after U.S. data showed the number of unemployment claims filed in the last week of March fell to the lowest since April 2008.

Euro Slides

The euro dropped to a four-week low against the yen as Spanish and Italian bonds slumped and borrowing costs rose at a French auction, adding to concern the debt crisis is spreading.

The 17-nation currency weakened to as low as 106.89 yen last night in Tokyo, compared with 108.13 yen at the close of stock trading yesterday, cutting the value of some overseas income at Japanese companies.

Sony, Japan’s biggest consumer-electronics exporter, lost 2 percent to 1,634 yen. Shimano Inc., a maker of bicycle parts that gets almost 40 percent of its sales in Europe, slipped 2 percent to 4,765 yen.

A report later today in Washington may show the U.S. economy added more than 200,000 jobs in March for a fourth straight month, the longest streak of such increases since 2000.

“The U.S. jobs data may be relatively strong, but we don’t know how the market will react to it,” said Kazuyuki Terao, chief investment officer of RCM Japan Co.

Steelmakers Drop

Steelmakers declined the most among the Topix’s 33 industry groups. Kobe Steel (5406) lost 3.1 percent to 127 yen after posting a loss of 20 billion yen ($243 million) in the year ended March 31 due to reversal of deferred tax assets, according to a preliminary earnings statement. The company earlier forecast a 10 billion yen loss for the period. Nippon Steel Corp. dropped 2.8 percent to 212 yen.

NSK sank 3.4 percent to 598 yen after Mito Securities cut the bearing maker’s investment rating to “neutral” from “neutral plus,” citing slumping industrial machine operations in China. Thai floods and discount requests from carmakers may have also dragged on earnings, Yoichiro Watanabe, an analyst at Mito Securities, said in a report dated yesterday.

Kansai Electric Power Co. rose 2.8 percent to 1,346 yen. Japanese Prime Minister Yoshihiko Noda and three cabinet members have reached a broad agreement on a new safety standard to allow the restart of two reactors at the utility’s Ohi nuclear power plant, according to an Asahi Newspaper report. Tokyo Electric Power Co., which owns the crippled Fukushima Dai-Ichi nuclear plant, gained 4.3 percent to 219 yen.

Astellas Pharma Jumps

Among other stocks that gained, Astellas Pharma Inc. rallied 3.2 percent to 3,360 yen. The drugmaker’s new treatment for overactive bladders won the backing of advisers to U.S. regulators even after the drug was linked to high blood pressure and other side-effects.

The Topix (MXAP) has advanced 13 percent this year, rebounding from last year’s 19 percent drop, amid signs the U.S. economy is improving. Shares on the gauge trade for an average of 1.01 times book value, compared with 2.3 times for the S&P 500 and 1.4 times for the Stoxx 600, according to Bloomberg data. A number less than one means that companies can be bought for less than value of their assets.

-- With assistance from Yoshiaki Nohara in Tokyo. Editors: Jim Powell, Jason Clenfield.

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

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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