Japan Stock Futures Rise on Optimism Election Will Spur Stimulus
Japanese stock futures rose, indicating the Nikkei 225 Stock Average will extend yesterday’s surge, amid speculation elections next month will hand power to an opposition party that advocates more aggressive monetary easing.
American Depositary Receipts of Honda Motor Co. jumped 1.8 percent as the yen weakened, boosting the earnings outlook for the exporter. Kirin Holdings Co. (2503) shares may be active after the beverage maker formed part of a takeover bid led by Singapore’s Overseas Union Enterprise Ltd. for Fraser & Neave Ltd. Buru Energy Ltd. surged 5.9 percent in Sydney after the oil and gas explorer said drilling results at its Ungani well are encouraging.
Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 8,875 in Chicago yesterday, up from 8,820 in Osaka, Japan. They were bid in the pre-market at 8,860 in Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index (AS51) fell 0.2 percent and New Zealand’s NZX 50 Index retreated 0.1 percent in Wellington.
“The opposition Liberal Democratic Party is likely to win the upcoming election and implement more aggressive monetary and fiscal action, including implementing negative interest rates, to boost the contracting economy,” said Matthew Sherwood, Perpetual Investment’s head of markets research in Sydney. Perpetual manages about $25 billion.
Prime Minister Yoshihiko Noda will dissolve parliament today, triggering an election on Dec. 16 that polls suggest his Democratic Party of Japan will lose. Shinzo Abe, the leader of the main opposition LDP, called yesterday for the central bank to pursue unlimited monetary stimulus to end deflation and revive an economy that shrank last quarter at the fastest pace since the 2011 earthquake. The yen slumped yesterday to the lowest level in more than six months against the dollar amid the speculation, dropping 1.2 percent to 81.19 per dollar.
Futures on the Standard & Poor’s 500 Index were little changed today. The S&P 500 fell 0.2 percent yesterday as Wal- Mart Stores Inc. forecast earnings that missed estimates and lawmakers prepared for budget talks.
The MSCI Asia Pacific (MXAP) Index gained 9.5 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending. The measure traded at 13.2 times estimated earnings, compared with 13 for the S&P 500 and 11.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. The gauge has fallen every day this week.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. retreated 0.5 percent to 89.17 yesterday in New York, its longest stretch of declines since September.
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