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Japan Stock Futures, Australian Shares Rise on U.S. Budget Talks

Japanese stock futures rose as the Bank of Japan begins a policy meeting and amid optimism U.S. lawmakers are making progress on budget talks. Australian shares advanced.

American Depositary Receipts of auto manufacturer Honda Motor Co. (7267) and camera maker Canon Inc. rose more than 1.5 percent as the yen trading near the lowest level in 20 months against the dollar boosted the earnings outlook for Japanese exporters. Shares of Nippon Telegraph and Telephone Corp., Japan’s biggest fixed-line phone company that is a customer of Oracle Corp., may be active after Oracle reported sales and profit that topped analyst estimates. BHP Billiton Ltd. (BHP), Australia’s largest oil producer, advanced 0.9 percent as crude prices climbed.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,030 in Chicago yesterday, up from 9,940 in Osaka, Japan. They were bid in the pre-market at 10,040 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.6 percent and New Zealand’s NZX 50 Index rose 0.8 percent.

“What is important and what is driving the market higher is that the two parties in the U.S. are now in constructive discussions over specific tax levels and spending programs and working toward a common middle ground,” said Cameron Peacock, Melbourne-based market strategist at IG Markets Ltd., a provider of trading services for equities, currencies and commodities.

Japan’s Nikkei 225 Stock Average (NKY) has climbed 15 percent since Nov. 14 on speculation the Liberal Democratic Party, which returned to power in last weekend’s elections, will spend more to boost the economy and pressure for more bond purchases by the Bank of Japan, which meets today. The BOJ is forecast to boost its asset purchases as soon as Dec. 20.

Japan Budget

Shinzo Abe’s LDP and coalition partner Komeito agreed to pass a supplementary budget possibly worth more than 10 trillion yen ($119 billion), the Nikkei newspaper reported, without saying where it got the information.

Standard & Poor’s 500 Index futures were little changed today. The gauge rose 1.2 percent yesterday, capping the biggest two-day gain in a month on the benchmark measure.

President Barack Obama proposed a budget plan that would cut about $1.2 trillion in federal spending and raise a similar amount in taxes in the next decade, according to a person familiar with the talks. House Speaker John Boehner said he will push a budget “plan B” measure that would include tax increases on income of more than $1 million, while continuing to negotiate with Obama.

The MSCI Asia Pacific Index rose 12 percent this year through yesterday as central banks from the U.S., Europe, Japan and China took action to spur economic growth. The gauge traded at 14.5 times average estimated earnings compared with 14 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Crude oil for January delivery advanced 73 cents to $87.93 a barrel yesterday on the New York Mercantile Exchange, the highest settlement since Dec. 4.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. climbed 1 percent yesterday in New York to close at the highest level since May 11.

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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