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Japan, Australia Stock Futures Fall Ahead of China Report

Japanese and Australian stock futures fell, signaling benchmark indexes in the two countries will retreat from a four-month high, ahead of a China manufacturing report that will indicate the strength of growth in the world’s second-largest economy.

American Depositary Receipts of Komatsu Ltd. (6301), the world’s second-biggest construction equipment maker that gets 13 percent of sales in China, slid 1.1 percent. ADRs of BHP Billiton Ltd. (BHP), the world’s largest mining company, slid 0.7 percent as metals prices retreated. Shares of Nippon Telegraph and Telephone Corp. may move as Japan’s No. 1 fixed-line phone company said it plans to buy back up to 3.4 percent of its shares for as much as 150 billion yen ($1.9 billion).

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 9,125 in Chicago yesterday, down from 9,170 in Osaka, Japan. They were bid in the pre-market at 9,120 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 0.2 percent today. New Zealand’s NZX 50 Index rose 0.6 percent in Wellington.

“Chinese data are on the soft side and hopes for stimulating fiscal and monetary countermeasures have thus far disappointed,” said Mikio Kumada, a Singapore-based global strategist for LGT Capital Management, which oversees more than $20 billion. “We continue to prefer a rather defensive overall picture. The monetary outlook and economic situation in Europe and Asia is more ambiguous than in the U.S., not to mention various other economic and political risks that remain.”

U.S. Futures

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge rose 0.1 percent yesterday, snapping a two-day decline, after the Bank of Japan increased its asset- purchase target and sales of existing American homes rose more than forecast.

The MSCI Asia Pacific (MXAP) Index gained 9.1 percent this year through yesterday compared with a 16 percent increase on the S&P 500 and a 12 percent advance for the Stoxx Europe 600 Index. Stocks advanced as central banks from Europe to the U.S. and Japan took measures to stimulate growth. The Asian benchmark traded at 12.9 times estimated earnings compared with 14.1 for the S&P 500 and 12.2 for the Stoxx Europe 600 Index.

Japan’s central bank yesterday unexpectedly expanded its asset-purchase target by 10 trillion yen to 55 trillion yen, seeking to avoid a further slowdown in the world’s third-largest economy.

Central banks in Asia, Europe and the U.S. are continuing to loosen policy as the euro-area debt crisis threatens global growth and financial stability.

China Manufacturing

The Bank of Japan (8301)’s decision followed last week’s vote by the U.S. Federal Reserve to extend its quantitative-easing program. The European Central Bank has agreed to buy the bonds of governments that accept austerity conditions to tame the euro turmoil.

Investors are awaiting the release today of a HSBC Holdings Plc China purchasing managers index, which will show the strength of manufacturing.

New Zealand’s economic growth slowed last quarter by less than economists forecast amid stronger farm output and construction, a government report showed today. Gross domestic product rose 0.6 percent in the three months ended June 30 from the first quarter, when it expanded a revised 1 percent.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in New York added 1.4 percent to 92.79 yesterday. The Thomson Reuters/Jefferies CRB Index of raw materials retreated 1 percent yesterday.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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