Japan Stock Futures Rise Before China Manufacturing PMI

Japanese stock futures rose as the yen weakened against the dollar for a third day and investors awaited a report that may show an expansion in Chinese manufacturing. Australian shares climbed.

American Depositary Receipts of Nomura Holdings Inc. (8604), Japan’s biggest brokerage, declined 0.5 percent as net income fell short of analysts’ estimates. Those of Kyocera Corp. slid 2.3 percent as the Japanese electronics maker reduced its profit forecast. ADRs of Honda Motor Co. declined 1.3 percent as third quarter operating profit at the carmaker missed estimates.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring next month closed at 11,135 in Chicago yesterday, up from 11,110 at the close in Osaka, Japan. They were bid in the pre-market at 11,150 in Osaka at 8:05 a.m. Australia’s S&P/ASX 200 Index gained 0.2 percent and New Zealand’s NZX 50 Index fell 0.1 percent.

“There is a general consensus that following such a strong six month re-weighting into stocks, earnings need to continue to back this move up,” said Evan Lucas, Melbourne-based market strategist at IG Markets Ltd., a provider of trading services. “The biggest news to affect our market today will be the release of China’s manufacturing PMI.”

At least 18 companies in Japan are scheduled to report results today. Of the 109 companies on the Topix Index that have reported earnings so far this quarter and for which Bloomberg has estimates, 58 percent have exceeded profit expectations, according to data compiled by Bloomberg.

Japan’s Rally

The Topix, heading for a 12th week of gains, has surged about 30 percent since Nov. 14, when elections were announced, on optimism Prime Minister Shinzo Abe’s new government will take steps to fight deflation. The gauge is trading at 1.1 times book value, compared with 2.25 for the Standard & Poor’s 500 Index and 1.62 for the Stoxx Europe 600 Index. The yen weakened to the lowest level since June 2010 to 91.81 per dollar.

China’s Purchasing Managers’ Index for manufacturing will rise to 51 in January from 50.6, according to a Bloomberg survey of economists ahead of today’s report. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. dropped 0.1 percent in New York yesterday.

Futures on the S&P 500 rose 0.2 percent. The gauge yesterday completed its best January rally since 1997. U.S. payrolls data today will show employers added 165,000 jobs last month, according to economists’ estimates.

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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