Japan Stock Futures Fall as IMF Cuts Global GDP Forecasts

Japanese stock futures fell after the International Monetary Fund cut its global growth forecasts as its member countries convene in Tokyo this week, damping demand for risky assets. Australian equities rose.

American depositary receipts of trading firm Mitsubishi Corp. (8058) dropped 1.3 percent from the closing share price in Tokyo. Oil Search Ltd., Papua New Guinea’s biggest oil producer, climbed 2.7 percent in early Sydney trading after signing exploration license agreements with Total SA affiliates. Shares of Daiichi Chuo Kisen Kaisha may be active after it said it may cancel ship orders, pare its fleet and sell new stock.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in December closed at 8,800 in Chicago yesterday, down from 8,870 in Osaka, Japan, on Oct. 5. Japan’s markets were closed yesterday for a public holiday. They were bid in the pre-market at 8,810 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.2 percent. New Zealand’s NZX 50 Index slipped 0.1 percent in Wellington.

“Asia is of course a world major trader and major exporter, and it’s suffering from not only a slowdown in China, but also across all of Europe,” said Matthew Sherwood, Perpetual Investments’ head of investment markets research in Sydney. Perpetual manages about $25 billion. “We are looking at balance-sheet risks in each individual company because we are in a capital-constrained world. Therefore, companies that can fund their own balance sheets are in a very strong relative position.”

Relative Value

The MSCI Asia Pacific Index gained 7.3 percent this year through yesterday as a wave of stimulus measure from Europe to the U.S. and Japan countered a global economic slowdown, hindered by Europe’s debt crisis. The Asian benchmark trades at 12.8 times estimated earnings on average, compared with 13.9 times for the Standard & Poor’s 500 Index (SPXL1) and 12.1 times for the Stoxx Europe 600 Index.

The world economy will expand 3.3 percent this year, the slowest pace since the 2009 recession, and 3.6 percent next year, the IMF said today. That compares with July predictions of 3.5 percent in 2012 and 3.9 percent in 2013. The Washington- based lender now sees “alarmingly high” risks of a steeper slowdown.

The IMF’s 188 member countries meet in Tokyo this week.

Futures on the Standard & Poor’s 500 Index were little changed today. The index dropped 0.4 percent in New York yesterday, when European finance ministers met in Luxembourg to discuss Spain’s overhaul effort and closer banking cooperation. German Chancellor Angela Merkel is scheduled to visit Greece today.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. retreated 1.1 percent to 92.13 yesterday in New York, the steepest drop since Sept. 20.

Energy shares may be active after crude oil for November delivery declined 55 cents to settle at $89.33 a barrel on the New York Mercantile Exchange.

Japan’s current account surplus probably shrank in August, according to economists surveyed by Bloomberg News before the Ministry of Finance releases the data today.

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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