Japan, Australian Stock Futures Advance on China Stimulus

Japanese and Australian stock futures rose as Chinese Premier Wen Jiabao said easing inflation is allowing room to adjust monetary policy and positive signs are emerging in the world’s second-largest economy.

American depositary receipts of Sony Corp. (6758), a Japanese consumer electronics exporter that gets almost 70 percent of its revenue overseas, rose 1 percent from the closing price in Tokyo after the yen weakened. Shares of All Nippon Airways Co., Japan’s largest carrier, may be active after saying it will sell shares. ADRs of Woodside Petroleum Ltd., Australia’s second- largest oil producer, gained 0.5 percent after crude prices increased.

Futures on the Nikkei 225 Stock Average expiring in September closed at 8,935 in Chicago yesterday compared with 8,920 in Osaka. They were bid in pre-market trading at 8,930 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index futures rose 0.1 percent today. New Zealand’s NZX 50 Index gained 0.1 percent in Wellington.

“Monetary easing is taking effect in China. Wen’s remarks are pushing it, and that’s a positive catalyst for the markets,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “The Premier seldom makes such direct remarks, but he might want to emphasize that government wants to support the economy by monetary policies.”

Wen Stimulus

State television reported Wen as saying there’s “growing room for monetary policy operation” during a two-day inspection tour in the eastern province of Zhejiang. “We have the conditions and capabilities, and will be sure to fulfill this year’s economic and social development targets,” Wen said, the official Xinhua News Agency reported yesterday. He said downward pressure on the economy remained “relatively large,” according to state radio.

Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today. The S&P rose added 0.1 percent yesterday in New York as investors weighed manufacturing data for clues on whether the Federal Reserve will move to stimulate the economy.

Industrial production in the U.S. increased in July, Fed data showed, propelled by a pickup in motor vehicle output and a rebound in power use during the hottest month on record. A separate report showed manufacturing in the New York area unexpectedly contracted in August for the first time since October.

“The U.S. economic data are mixed and business sentiment is neither good nor bad,” said Mitsushige Akino, who oversees about $633 million in Tokyo at Ichiyoshi Investment Management Co. “That’s boosting expectations the Fed may add to quantitative easing.”

Yen Falls

U.S. trading has slowed as vacationing traders await policy clues from the Fed’s summit at the end of the month and the European Central Bank meeting in September.

The yen depreciated to as low as 79.05 against the dollar last night in Tokyo, compared with 78.79 at the close of stock trading yesterday, boosting the value of overseas income at Japanese companies when repatriated.

Crude oil for September delivery gained 1 percent to $94.33 a barrel in New York yesterday, the highest settlement since May 14.

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S was little changed at 92.48 yesterday.

The MSCI Asia Pacific Index (MXAP) fell 7 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen and China’s economy is slowing. The regional benchmark index traded at 12.4 times estimated earnings compared with 13.6 times for the S&P 500 Index and a multiple of 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Of the 1,008 companies listed on the Asian benchmark gauge, 117 are reporting earnings this week, according to data compiled by Bloomberg. Of the 428 companies that have posted quarterly results since July 1, and for which Bloomberg has estimates, 44 percent have exceeded expectations.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

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