Japanese and Australian stock futures fell after rising bond yields in Spain highlighted the risk that the euro member may need a bailout, reviving concern about Europe’s sovereign-debt crisis and damping the earnings outlook for Asian exporters.
American depositary receipts of Canon Inc., Japan’s biggest camera maker that counts Europe as its No. 1 market, slid 2 percent from the closing share price in Tokyo. Those of Mitsubishi UFJ Financial Group Inc., Japan’s largest lender, dropped 3.7 percent. ADRs of BHP Billiton Ltd., Australia’s biggest oil producer and mining company, fell 1.8 percent after oil and metal prices declined.
Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 9,360 in Chicago yesterday, down from 9,540 in Osaka, Japan. They were bid in the pre-market at 9,380 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index lost 1.3 percent today. New Zealand’s NZX 50 Index declined 0.5 percent in Wellington.
“Spain is in a very difficult situation and more likely than not to require some type of official intervention at some point,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “Europe is still 20 percent of the world economy and obviously a big customer of Asia.”
Spanish Bond Yields
Futures on the Standard & Poor’s 500 Index rose 0.2 percent today. The index fell 1.7 percent in New York yesterday as Spanish bonds slumped after Economy Minister Luis de Guindos declined to rule out a rescue and Bank of Spain Governor Miguel Angel Fernandez Ordonez said the nation’s lenders may need extra capital if the economy weakens more than expected. The 10-year Spanish bond yield surged 22 basis points to 5.98 percent, the highest level this year. The Italian 10-year yield also rose 23 basis points to 5.69 percent.
The yen rose against all of its 16 major counterparts yesterday, denting the earnings outlook for Japanese exporters. The yen touched 80.62 per dollar today, the highest level since March 7, while reaching 105.49 per euro, the strongest since Feb. 22.
In Japan, a government report is forecast to show machine orders fell 0.8 percent in February after rising 3.4 percent in January, according to the median estimate of economists surveyed by Bloomberg. The report is due at 8:50 a.m. Tokyo time.
Brent oil for May settlement dropped $2.79, or 2.3 percent, to end the session at $119.88 a barrel on the London-based ICE Futures Europe exchange. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum dropped 3 percent yesterday.
The MSCI Asia Pacific Index gained 8.9 percent this year through yesterday, compared with an 8 percent advance by the S&P 500 and a 3.3 percent rise by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with 13 times for the S&P 500 and 10.5 times for the Stoxx 600.
Chinese equities in the U.S. slid, led by consumer stocks, as import growth that trailed economists’ estimates added to concern that the world’s second-largest economy is faltering. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. sank 2.5 percent to 99.44 yesterday in New York, the lowest level since Jan. 31.