Japanese, Australian Stock Futures Fall on Yen, Oil

Japanese stock futures dropped, signaling equities are poised to snap a two-day rally, after the yen gained, damping the earnings prospects for exporters. Australian equity futures slid as crude oil fell.

American depositary receipts of Toyota Motor Corp. (7203), a Japanese carmaker that gets 75 percent of its sales abroad, declined 2.5 percent from the closing share price in Tokyo. ADRs of BHP Billiton Ltd. (BHP), Australia’s largest mining company and oil producer, slid 1.5 percent as crude fell.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 13,985 in Chicago yesterday, compared with 14,200 in Osaka, Japan. They were bid in the pre-market at 13,970 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index dropped 0.4 percent today. New Zealand’s NZX 50 Index was little changed in Wellington.

“Apart from volatility caused by the currency and bonds, we are at a juncture where further moves from Japanese equities need to be fundamentally driven,” said Angus Gluskie, managing director at White Funds Management in Sydney, who manages more than $400 million. “It’s difficult for the market to keep rallying.”

Traders of Japanese government bonds want the central bank to buy more short-term notes and to conduct purchases more frequently, according to Bank of Japan officials after a meeting with market participants. The BOJ is trying to steady a debt market where volatility has risen to the highest in four years due to unprecedented monetary easing steps last month.

Yen Strengthens

The yen rose against 15 of its 16 major counterparts yesterday. A stronger yen cuts the value of overseas earnings at Japanese companies when repatriated.

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The index dropped 0.7 percent in New York yesterday amid concern that the Federal Reserve could begin to taper its debt-buying program as the economy continues to improve.

The MSCI Asia Pacific Index gained 6.6 percent this year through yesterday, compared with a 16 percent rally by the S&P 500 and an 8.2 percent advance by the Stoxx Europe 600 Index.

West Texas Intermediate crude for July delivery slid $1.88 to $93.13 a barrel on the New York Mercantile Exchange, the lowest settlement since May 1.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. sank 1.6 percent to 91.57 yesterday, the lowest close in a month. Futures on Hong Kong’s Hang Seng (2828) Index dropped 0.5 percent and contracts on the Hang Seng China Enterprises Index of mainland companies trading in Hong Kong declined 0.9 percent.

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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