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Japan Stock Futures Gain on Expectations Fed, ECB to Ease

Japanese and Australian stock futures rose on expectations that a contraction in U.S. manufacturing may encourage the Federal Reserve to ease monetary policy as the European Central Bank cuts interest rates to help contain the region’s sovereign-debt crisis.

American depositary receipts of Nissan Motor Co. (7201), which gets about 80 percent of its sales overseas, added 0.6 percent from the closing share price in Tokyo. Shares of Kawasaki Kisen Kaisha Ltd. may be active after the Japanese shipping line said it will raise as much as 28.6 billion yen ($360 million) in a public share sale. Bandanna Energy Ltd., may be active in Sydney trading after Credit Suisse Group initiated coverage of the coal explorer with an “outperform” rating.

Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 9,035 in Chicago yesterday, up from 9,020 in Osaka, Japan. They were bid in the pre-market at 9,030 in Osaka at 8:05 a.m. Futures on Australia’s S&P/ASX 200 Index rose 0.4 percent today. New Zealand’s NZX 50 Index slid 0.1 percent in Wellington.

“Additional policy easing by the ECB and U.S. will support the economy and market liquidity,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “Those expectations are bolstering stock markets.”

U.S. manufacturing unexpectedly shrank in June for the first time since the economy emerged from a recession three years ago, indicating a mainstay of the expansion may be faltering, a report showed yesterday.

Fed Action

The weakness in manufacturing may encourage more accommodative policies from the Federal Reserve, Princeton University economist Alan Blinder said in an interview on Bloomberg Television’s “Market Makers” with Erik Schatzker and Scarlet Fu.

“Data like this that keep coming in are encouraging or strengthening the positions of the doves on the Fed,” said Blinder, a former Fed vice chairman. “You know there’s a big civil war going on in the Federal Reserve, and weakening the position of the hawks.”

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The stock gauge gained 0.3 percent in New York yesterday as takeovers helped the market recover from earlier losses triggered by the manufacturing contraction. Micron Technology Inc. agreed to acquire Elpida Memory Inc., an Apple Inc. supplier. Bristol-Myers Squibb Co. agreed to pay $5.3 billion for drugmaker Amylin Pharmaceuticals Inc.

Europe Rates

Unemployment in the 17-nation euro area reached the highest level on record as a deepening economic slump and budget cuts prompted companies from Spain to Italy to reduce their workforces, a report showed yesterday.

European stocks rose as investors bet central banks will add to measures unveiled by the region’s governments to contain the sovereign-debt crisis. The ECB and the Bank of England announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 57 economists.

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S lost 0.7 percent to 90.59 in New York yesterday.

The MSCI Asia Pacific Index (MXAP) gained 3.4 percent this year through yesterday, compared with an 8.6 percent advance by the S&P 500 and a 4.2 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 13.2 times for the S&P 500 and 10.7 times for the Stoxx 600.

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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