Japanese Stock Futures Rise on Bank of Japan Policy Optimism

Japanese stock futures rose, indicating the Nikkei 225 Stock Average (NKY) will climb for a fifth day, amid speculation Bank of Japan (8301) measures to fight deflation will boost corporate profits.

American Depositary Receipts of Toyota Motor Corp., the world’s largest carmaker, advanced 2.1 percent as the yen fell to the weakest level since May 2009. Shares of HTC Corp. (2498) may be active in Taipei after Taiwan’s largest smartphone maker posted its lowest quarterly profit on record. ADRs of Woodside Petroleum Ltd., Australia’s second-biggest oil producer, gained 0.4 percent as crude prices rose.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 13,430 in Chicago yesterday, up from 13,210 at the close in Osaka, Japan. They were bid in the pre-market at 13,410 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index (AS51) advanced 0.4 percent and New Zealand’s NZX 50 Index added 0.1 percent.

“The effects of the BOJ’s additional policy actions will soon start to replace the policy actions themselves as the market driver,” Masayuki Kichikawa, chief economist in Tokyo at Bank of America Corp., wrote in an e-mail. “Stronger-than- expected leadership from Governor Haruhiko Kuroda has enhanced the BOJ’s policy credibility.”

The Nikkei 225 Stock Average yesterday closed at the highest level in 4 1/2 years as the yen weakened to its lowest level against the dollar since June 2009, boosting the earnings outlook for exporters.

BOJ Stimulus

BOJ officials said on April 4 the central bank will increase its monthly bond purchases to 7.5 trillion yen ($76 billion), exceeding the 5.2 trillion yen forecast by economists surveyed by Bloomberg. They also suspended a cap on some bond holdings and dropped a limit on debt maturities, while also setting a two-year horizon for their goal of 2 percent inflation.

The MSCI Asia Pacific Index (MXAP), the regional equities benchmark, advanced the last five months as Japanese shares increased on speculation the nation will deploy more stimulus and amid signs the U.S. economy is recovering. That left the gauge yesterday trading at 13.6 times average estimated earnings compared with 14.1 for the Standard & Poor’s 500 Index (SPX) and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The measure gained 0.6 percent yesterday as investors speculated first-quarter earnings for U.S. companies would help equities rebound from their biggest weekly decline of the year.

North Korea

Rising military tensions with North Korea have driven the cost of protecting against swings in a security tracking South Korean stocks to the highest level on record compared with emerging-market equities. Implied volatility, the key gauge of option prices, for contracts closest to the iShares MSCI South Korea Capped Index Fund jumped 26 percent this month to 23.3, according to data compiled by Bloomberg. That’s a record 41 percent more than the measure for the iShares MSCI Emerging Markets Index.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 0.5 percent in New York yesterday. Gauges of consumer and producer prices for the world’s second-largest economy in March are scheduled to be released today.

West Texas Intermediate crude oil futures rose 0.1 percent, a second day of gains, amid clashes in Nigeria after talks between Iran and world powers ended without agreement.

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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