Japanese Equity Futures Decline Before Employment, CPI Releases

Japanese stock futures fell, with the Nikkei 225 Stock Average (NKY) poised to pare some of the gains that have taken the gauge to the longest winning streak since 2006, before jobless and consumer prices data in Japan and a gauge of manufacturing in China are released today.

American Depositary Receipts of Toyota Motor Corp. slid 0.3 percent. ADRs of Sony Corp. (6758) gained 1 percent after the consumer electronics firm said cash from selling a building in Tokyo will add 41 billion yen ($443 million) to profit in the fourth quarter. ADRs of Tokyo Gas Co. (9531) gained 3.8 percent as the Nikkei newspaper reported the company will increase share buybacks.

Futures on Japan’s Nikkei 225 Stock Average expiring this month closed at 11,480 in Chicago yesterday, down from the 11,500 closing level in Osaka, Japan. They were bid in the pre- market at 11,500 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index (AS51) retreated 0.3 percent and New Zealand’s NZX 50 Index fell 0.3 percent.

Japan’s jobless rate is forecast to hold at 4.2 percent in January, according to economists’ estimates ahead of the release at 8:30 a.m. in Tokyo. Japan consumer prices index will fall 0.2 percent in January, the median of economists’ estimates show.

China’s Purchasing Managers’ Index will rise to 50.5 in February, economists forecast before the National Bureau of Statistics and China Federation of Logistics and Purchasing data scheduled to be released today.

Japan’s Nikkei has risen for seven months, helping the MSCI Asia Pacific Index to a four-month advance, its longest winning streak since September 2009, amid signs the U.S. and Chinese economies are improving and on bets Prime Minister Shinzo Abe will step up efforts to stimulate Japanese growth.

Relative Value

The Asia-Pacific benchmark regional equities gauge traded at 14.8 times average estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index (SPX) and 12.5 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. U.S. stocks erased gains in the final minutes of trading yesterday as investors prepared for rebalancing of benchmark indexes and the Senate voted to keep $85 billion of spending cuts in place. The S&P 500 lost 0.1 percent.

The Senate rejected a pair of partisan proposals to replace $85 billion in automatic spending cuts, known as sequestration, scheduled to start tomorrow. No additional congressional action is planned before the start of the cuts, to be split between defense and non-defense spending. President Barack Obama has summoned congressional leaders to the White House today to discuss the next step.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 0.2 percent to 94.02 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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