Japan, Australian Stock Futures Rise on Stimulus Optimism

Japanese and Australian stock futures rose after Federal Reserve Chairman Ben S. Bernanke signaled further monetary easing. Gains in Asian equities may be limited after China’s manufacturing unexpectedly contracted in August and the yen’s rise to a three-week high against the dollar weighs on Japanese exporters.

American depositary receipts of Honda Motor Co. (7267), Japan’s second-largest carmaker by market value, rose 1 percent from the closing share price in Tokyo. Those of Westpac Banking Corp. (WBC), Australia’s No. 2 lender by market value, advanced 1.1 percent. Sharp Corp. shares may be active after the Nikkei newspaper reported the Japanese television maker cut the price of a stake it is selling to Taiwan’s Foxconn Technology Group.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in September closed at 8,890 in Chicago on Aug. 31, compared with 8,820 in Osaka, Japan. They were bid in the pre-market at 8,900 in Osaka, at 8:18 a.m. local time. Futures on Australia’s S&P/ASX 200 Index added 0.6 percent today. New Zealand’s NZX 50 Index gained 0.2 percent in Wellington.

“The market is getting excited about more stimulus,” said Donald Williams, chief investment officer at Platypus Asset Management Ltd. that manages about $1 billion. “You got weak data coming out of China, and you got mixed data coming out of the U.S. I think it’s going to be difficult for the market to keep rallying on the promise of QE and other measures without some improvement in the data,” he said, referring to Fed’s asset purchases, known as quantitative easing.

Asset Purchases

Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today. The index advanced 0.5 percent in New York on Aug. 31, capping its third monthly gain, after Bernanke said he wouldn’t rule out measures to lower the jobless rate. Two rounds of large-scale asset purchases have failed to bring the unemployment rate below 8 percent more than three years into the recovery.

Additional monetary easing in the U.S. could be a mixed blessing for Japanese equities because it buoys investors’ risk sentiment while weakening the dollar against the yen. The dollar touched 78.19 yen on Aug. 31, the lowest since Aug. 13.

The MSCI Asia Pacific Index (MXAP) lost 0.8 percent in August, the first monthly drop since May, on concern policy makers won’t introduce enough stimulus measures to revive the global economy. Stocks in the Asian benchmark were valued at 12.3 times estimated earnings on average as of last week, compared with 13.6 times for the S&P 500 and 11.6 times for the Stoxx Europe 600 Index.

In China, the Purchasing Managers Index fell to 49.2 in August from 50.1 in July, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Sept. 1. That’s the first contraction in nine months.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. rose 1.4 percent in August to 87.95, the steepest rise since February.

To contact the reporter on this story: 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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