Japan Stock Futures Fall on Higher Yen, Coca-Cola Profit

July 17 (Bloomberg) -- Japanese stock futures fell, signaling the Nikkei 225 Stock Average may retreat from an eight-week high, after the yen rose, Coca-Cola Co.’s profit dropped and a Federal Reserve official called for cuts to U.S. stimulus. Australian equity futures declined.

American depositary receipts of Toyota Motor Corp., a Japanese carmaker that gets 31 percent of its sales in North America, dropped 1.1 percent from the closing share price in Tokyo. Those of Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 1.1 percent. ADRs of Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, declined 0.2 percent after crude fell.

Futures on Japan’s Nikkei 225 expiring in September closed at 14,515 in Chicago yesterday, compared with 14,600 in Osaka, Japan. They were bid in the pre-market at 14,510 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index slipped 0.1 percent. New Zealand’s NZX 50 Index was little changed. Futures on Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland companies trading in Hong Kong both climbed 0.3 percent.

“Share markets in Japan and the U.S. are overheating and need a quick correction,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s second-biggest lender by market value. “Investors are paring back their optimistic outlook for U.S. earnings.”

Stimulus Debate

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The gauge dropped 0.4 percent in New York yesterday, halting its longest rally since January, as Coca-Cola reported profit fell 4 percent, the second quarterly decline in a row, as sales were sapped by economic weakness in China and Europe, shifting tastes in the U.S. and unseasonable weather in places such as India.

Fed Bank of Kansas City President Esther George said yesterday the U.S. was on the “right path” for economic recovery and that cuts in the pace of stimulus are “appropriate.” Fed Chairman Ben S. Bernanke will deliver his semi-annual monetary policy report to Congress this week, starting today at the House Financial Services Committee.

The yen gained 0.8 percent to 99.10 per dollar yesterday before trading at 99.15 at 7:50 a.m. in Tokyo.

West Texas Intermediate crude for August delivery slid 32 cents to settle at $106 a barrel on the New York Mercantile Exchange.

The MSCI Asia Pacific Index gained 5.1 percent this year through yesterday. The Asian benchmark traded at 13.3 times estimated earnings, compared with 15.2 times for the S&P 500 and 13.2 times for the Stoxx Europe 600 Index.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. gained 0.5 percent to 88.77 yesterday, the strongest level since June 10.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net