Japan Stock Futures Rise as Yen Weakens to 27-Month Low

Japanese stock futures rose, indicating the Nikkei 225 Stock Average (NKY) may extend a nine-month high, as the yen fell against the dollar to the lowest level since September 2010, boosting the earnings outlook for exporters. Australian shares dropped.

American Depositary Receipts of Canon Inc. (7751), the Japanese camera maker that gets 80 percent of its sales abroad, gained 1.3 percent. ADRs of Toyota Motor Corp. fell 0.4 percent after the carmaker said it will take a $1.1 billion write-down to settle claims that its vehicles lost value because of recalls for unintended acceleration-related issues. BHP Billiton Ltd. (BHP), Australia’s largest oil producer, gained 0.3 percent as crude advanced to a two-month high.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,335 in Chicago yesterday, up from 10,240 in Osaka, Japan. They were bid in the pre-market at 10,340 in Osaka at 8:05 a.m. Australia’s S&P/ASX 200 Index slipped 0.1 percent. New Zealand’s NZX 50 Index rose 0.1 percent.

“The message from Japan is clear,” said Stan Shamu, a markets strategist at IG Markets Ltd. in Melbourne. “The incoming government will do everything in its power to weaken the yen and stimulate the economy.”

Japan’s currency held near a 27-month low before data tomorrow that may show Japan’s consumer prices fell last month, fanning speculation newly installed Prime Minister Shinzo Abe will push the central bank to boost cash infusions.

The yen has weakened against all of its 16 major counterparts this year. Abe said in a media briefing yesterday that “bold’ monetary policy is one of the three pillars of his economic measures.

Fiscal Cliff

Standard & Poor’s 500 Index futures fell 0.1 percent. The gauge slid 0.5 percent yesterday as President Barack Obama and Congress prepared to resume budget talks and retailers slumped after the Christmas holiday.

House Speaker John Boehner and the president have been unable to agree on tax-rate increases for top earners or cuts to entitlement programs, complicating the chances of getting a package agreed by year end.

U.S. Treasury Secretary Timothy F. Geithner said he will take ‘‘extraordinary measures” to postpone a U.S. default for about two months while Obama and Congress work out a deficit- reduction deal. Geithner said the government will hit its statutory debt ceiling on Dec. 31. To avert a default, the Treasury will take action to create about $200 billion in headroom under the debt limit.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in New York surged 1.3 percent to 96.92 yesterday in New York.

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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