Japan Stock Futures Gain as Yen Falls to 4-Month Low on Stimulus

Japanese stock futures rose after the yen weakened to a four-month low against the dollar on speculation the Bank of Japan will expand monetary stimulus next week. Australian equities were little changed.

American Depositary Receipts of Honda Motor Co. (7267), a Japanese carmaker that counts North America as its biggest market, rose 0.6 percent from the closing price in Tokyo. Aeon Co. may be active on a report the retailer is in talks to buy Carrefour SA’s Malaysian supermarket operations. ADRs of Canon Inc., the world’s biggest camera maker, sank 4 percent after cutting its profit forecast. BHP Billiton Ltd. (BHP), Australia’s top oil producer, added 0.2 percent after crude prices snapped a five- day decline.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 9,090 in Chicago yesterday, up from 9,070 in Osaka, Japan. They were bid in the pre-market at 9,070 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index were little changed today.

“Investors are focusing on currency movements, affecting stock markets.” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. “If the yen weakens further, Japanese stocks are likely to rise.”

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The gauge gained 0.3 percent yesterday in New York amid better-than-estimated corporate earnings.

U.S. jobless claims fell last week, returning to a level that shows the labor market is making limited progress, while Americans signed fewer contracts than forecast in September to purchase previously owned homes, a sign the industry’s recovery will be uneven, report showed yesterday.

Yen Falls

Japan’s currency weakened against the dollar ahead of a central bank policy meeting on Oct. 30. The yen depreciated to as low as 80.38 against the dollar today in Tokyo, the weakest level since June 25, compared with 80.07 at the close of stock trading yesterday. A weaker yen boosts the value of overseas income at Japanese companies when repatriated.

“What’s behind the yen’s weakness are expectations for monetary easing,” said Yoshitsugu Fujita, assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd.

Crude oil for December delivery climbed 0.4 percent to settle at $86.05 a barrel in New York yesterday, rising for the first time in six days.

Chinese Stocks

The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities in the U.S rose for a second day, led by Melco Crown Entertainment Ltd. after the casino operator said it plans to invest in and operate projects in the Philippines.

China’s yuan climbed to a 19-year high and touched the strong end of its allowed trading range for the first time, buoyed by signs of a pickup in the world’s second-largest economy. Forward contracts strengthened. The currency touched 6.2417 per dollar in Shanghai, exceeding the People’s Bank of China’s reference rate by the maximum allowed 1 percent.

The MSCI Asia Pacific (MXAP) Index rebounded about 12 percent through yesterday 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 13.0 times estimated earnings on average, compared with 13.5 for the Standard & Poor’s 500 Index and 12.0 for the Stoxx Europe 600 Index.

Japan’s current earnings season peaks next week, with 571 of the 1,672 Topix companies reporting results.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

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

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