Japanese stock futures rose after Federal Reserve Chairman Ben S. Bernanke said the U.S. needs stimulative monetary policy for the foreseeable future to buoy the economic recovery.
Shares of Asahi Glass Co. might move as the Nikkei newspaper reported the company may report a 30 percent drop in operating profit. Olympus Corp., the world’s biggest maker of endoscopes, may rise as Deutsche Bank AG advised buying the shares. Shares of Australia & New Zealand Banking Group Ltd. may move as its group treasurer said the Australian dollar’s 15 percent decline added about A$7 billion ($6.4 billion) to its balance sheet.
Futures on Japan’s Nikkei 225 Stock Average expiring in September rose 0.5 percent to 14,400 in Chicago as of 8:14 a.m. Tokyo time. They were bid in the pre-market at 14,390 in Osaka. Futures on the Standard & Poor’s 500 Index gained 0.8 percent. Contracts on Australia’s S&P/ASX 200 Index advanced 0.1 percent and futures on Hong Kong’s Hang Seng Index slid less than 0.1 percent. New Zealand’s NZX 50 Index was little changed.
“The Fed’s saying tapering won’t happen yet,” Matthew Sherwood, head of investment market research at Perpetual Ltd., which oversees $25 billion in Sydney, said by telephone. “Equities will still be outperforming for now. Valuations aren’t particularly stretched and earnings so far have been reasonably good. We’re continuing to add to positions where we see opportunities.”
Bernanke, who sparked a stock and bond rout in May after signaling the Fed’s asset buying program could be tapered, yesterday said “highly accommodative” monetary policy will be needed for the “foreseeable future” after a speech in Cambridge, Massachusetts.
Minutes of the Fed’s June meeting showed that while “several members judged that a reduction in asset purchases would likely soon be warranted,” many want to see further improvement in the labor market before reducing its $85 billion-a-month quantitative easing program.
The MSCI Asia Pacific index fell 8.2 percent through yesterday from a five-year high on May 20 amid concern the Fed will begin tapering stimulus as China’s economy slows and Japan puts off unveiling economic reform policies until after upper house elections later this month.
That left the gauge trading at 13 times average estimated earnings compared with 15 for the Standard & Poor’s 500 Index and 13.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Bank of Japan’s board will decide on policy and update its economic forecasts today. Thirteen of 20 economists in a Bloomberg News survey completed July 8 saw no extra BOJ loosening in the next six months amid signs the recovering economy may spur inflation. That was a reversal from a poll in May.
Futures contracts on the Hang Seng China Enterprises Index of mainland Chinese companies trading in Hong Kong retreated 0.1 percent. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. rose 0.2 percent in New York yesterday.