Japan Stock Futures Drop on U.S. Earnings, Ahead of Export Data

Japanese stock futures and Australian equities fell as earnings at U.S. bellwether General Electric Co. missed estimates and before a report expected to show Japan’s exports slowed for a fourth month.

American Depositary Receipts of Canon Inc., a Japanese camera maker that gets 80 percent of its revenue overseas, lost 2.4 percent from the closing price in Tokyo. Fanuc Corp. (6954) may be active after JPMorgan Chase & Co. cut the robot maker’s equity rating to neutral. BHP Billiton Ltd. (BHP), Australia’s top oil producer and the world’s No. 1 mining company by market value, fell 1.3 percent after prices of oil and metals slid.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,860 in Chicago on Oct. 19, down from 8,990 in Osaka, Japan. They were bid in the pre-market at 8,860 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index lost 1 percent today. New Zealand’s NZX 50 Index fell 0.3 percent in Wellington.

“In the U.S., macro-economic data is solid but corporate earnings are unimpressive as a whole,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “There is strong uncertainty about July-September earnings that many Japanese companies start reporting this week.”

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge fell 1.7 percent on Oct. 19 after Microsoft Corp. and General Electric reported earnings that missed estimates. As well, purchases of existing houses dropped 1.7 percent to a 4.75 million annual rate, matching the median forecast of economists surveyed by Bloomberg, figures from the National Association of Realtors showed on Oct. 19 in Washington.

Japanese Exports

Japan’s exports dropped 9.9 percent in September, falling for a fourth month, a Finance Ministry report due at 8:50 today in Tokyo, is forecast by economists to show. The decline would be the biggest since May 2011.

Japanese Economy Minister Seiji Maehara said the country needs more monetary easing and policy efforts to encourage growth as the government prepares for elections. The government plans to inject about 200 billion yen ($2.5billion) into the economy, Maehara said yesterday on a Fuji Television program, without giving details on the source of those funds.

In Europe, French President Francois Hollande said additional assistance for Spain wasn’t discussed at a summit of European leaders in Brussels last week. Germany and France agreed to enforce common banking regulation for the euro area’s 6,000 lenders by the end of next year.

No Pressure

Separately, Spanish Prime Minister Mariano Rajoy said on Oct. 19 he’s not facing pressure to seek a bailout and he wouldn’t take any such pressure into account in any case.

The euro weakened to as much as 103.13 yen today in Tokyo, compared with compared with 103.76 at the close of stock trading on Oct. 19, cutting the value of overseas income at Japanese companies when repatriated.

Crude oil for November delivery lost 2.2 percent to settle at $90.05 a barrel in New York on Oct. 19, the biggest decline since Oct. 3. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum sank 2.4 percent, the most since June 21.

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S slipped 0.7 percent to 95.54 in New York on Oct. 19, snapping a seven-day gain.

The MSCI Asia Pacific (MXAP) Index rebounded 13 percent through Oct. 19 from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 13.2 times estimated earnings on average, compared with 13.7 for the S&P 500 and 12.2 for the Stoxx Europe 600 Index.

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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