Japanese Stock Drop as Europe Debt Crisis Concern Flares

Japanese stock futures dropped as U.S. employers added fewer jobs than forecast, damping the outlook for a recovery in the world’s biggest economy and denting the earnings prospects for Asian exporters.

American depositary receipts of Kyocera Corp. (6971), an electronics maker that gets more than half of its sales overseas, lost 1.5 percent from the closing share price in Tokyo as the yen strengthening against the dollar. Those of Mitsubishi Corp., Japan’s largest commodities trader by market value, slid 1.3 percent after oil prices slid. Shares of Nachi-Fujikoshi Corp. may be active after the bearing maker posted lower profit.

“The results of the employment data may be a disappointment to investors,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities Co. in Tokyo. “People in the markets expected U.S. jobs would improve.”

Futures on Japan’s Nikkei 225 Stock Average (NKY) were bid in the pre-market at 9,540 in Osaka at 8:05 a.m. compared with 9,680 at the close on April 6. Markets in Australia, New Zealand and Hong Kong are closed today for a holiday.

Futures on the Standard & Poor’s 500 Index (SPXL1) sank 1.2 percent today after the Labor Department said on April 6 that U.S. employers added 120,000 jobs in March, the lowest number in five months. The data also showed the unemployment rate fell to 8.2 percent as people left the labor force, while workers put in fewer hours. Markets in the U.S. were closed April 6 for a national holiday.

Yen Strength

The yen appreciated to as high as 81.24 against the dollar today in Tokyo, compared with 82.27 at the close of stock trading on April 6. Against the euro, Japan’s currency strengthened to 106.30 from 107.55. A stronger yen cuts the value of some overseas income for Japanese companies.

Crude oil for May delivery dropped as much as 1.2 percent to $102.03 a barrel in electronic trading on the New York Mercantile Exchange today.

The MSCI Asia Pacific Index (MXAP) gained 9.7 percent this year through April 6, compared with an 11.2 percent advance by the S&P 500 and a 5.9 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.4 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 below 1 means companies can be bought for less than value of their assets.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@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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