Japan Stock Futures Drop as Yen Gains; Nissan ADRs Fall

Japanese stock futures fell as the yen strengthened against the dollar for a second day, curbing the earnings outlook for companies that make sales overseas.

American Depositary Receipts of Nissan Motor Co., which gets about 80 percent of its sales abroad, lost 0.7 percent. Shares of KDDI Corp. may be active as Japan’s second-biggest mobile-phone company raised its profit forecast and announced a 2-for-1 stock split.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,775 in Chicago yesterday, down from 10,810 at the close in Osaka, Japan. They were bid in the pre-market at 10,770 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index (AS51) rose 0.2 percent, poised for its longest streak of gains since December 2004 and New Zealand’s NZX 50 Index fell less than 0.1 percent.

“Given the bull run stocks have enjoyed on the back of government-policy expectations, and the fact that investors are largely skewed towards long positions, we consider the market correction as no more than an adjustment of positions,” said Shun Maruyama, chief Japan equity strategist at BNP Paribas SA in Tokyo. We’re “expecting a more sustainable rally after the market consolidates,” he said.

The Nikkei 225 Stock Average has climbed 25 percent since elections were announced on Nov. 14 through Jan. 25 on optimism Prime Minister Shinzo Abe’s new government will take the necessary steps to fight deflation.

Japan’s currency advanced from its weakest level versus the dollar since 2010 as technical indicators signaled it may have dropped too much. The yen climbed 0.2 percent to 90.70 per dollar as of 7:45 a.m. in Tokyo.

The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.3 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 Index fell 0.1 percent today. The gauge yesterday dropped as a decline in pending home sales overshadowed a gain in durable-goods orders, while investors watched company earnings reports. About 6.1 billion shares traded hands on U.S. exchanges yesterday, or 1.1 percent below the three-month average.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. rose 0.1 percent to 99.72 in New York yesterday.

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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