Japanese Stock Futures, Australian Shares Fall Amid Fed Debate

Japanese stock futures and Australian equities fell after minutes of the Federal Reserve’s meeting showed policy makers were divided about bond purchases known as quantitative easing.

American Depositary Receipts of Toyota Motor Corp. (7203), a carmaker that gets a quarter of its revenue in North America, slid 0.4 percent from the closing share price in Tokyo. Suppliers for Apple Inc. may be active in Asia as Foxconn Technology Group, the manufacturer of products including the iPhone, froze hiring in China. BHP Billiton Ltd., the world’s biggest miner, fell for a second day, losing 3 percent, after reporting yesterday that first-half profit plunged 58 percent.

Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in March closed at 11,415 in Chicago yesterday compared with 11,440 in Osaka, Japan. They were bid in the pre-market at 11,430 in Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index fell 0.6 percent today. New Zealand’s NZX 50 Index dropped 0.2 percent in Wellington.

“The Fed now is getting very nervous about the continuation of its quantitative easing program,” said Matthew Sherwood, head of investment market research in Sydney at Perpetual Investments, which manages about $25 billion. “If they say they have to wind it down before the labor market stabilizes, that would take one of the key supports away from the market.”

Fed Minutes

Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.1 percent today. The index fell 1.2 percent in New York yesterday, the biggest drop since November, as minutes of the Federal Open Market Committee’s Jan. 29-30 meeting showed policy makers were divided about the strategy behind Chairman Ben S. Bernanke’s program of buying bonds until there is “substantial” improvement in a U.S. labor market.

Some said an earlier end to purchases might be needed, and others warned against a premature withdrawal of stimulus. Several policy makers said the central bank should be ready to vary the pace of its $85 billion in monthly bond purchases.

The MSCI Asia Pacific Index advanced 11 percent from the start of November through yesterday, led by Japanese shares as Prime Minister Shinzo Abe pledged to beat deflation and pressed the central bank to ease monetary policy. Asia’s benchmark traded at 14.9 times estimated earnings as of yesterday compared with 13.7 for the S&P 500 (SPX) and 12.5 for the Stoxx Europe 600 Index (SXXP), according to data compiled by Bloomberg.

The Bloomberg China-US Equity Index of the most-traded Chinese equities in the U.S. dropped 1.1 percent to a two-month low of 94.46 yesterday.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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