Japanese Stock Futures Gain as Yen Weakens, Boosting Exporters

Japanese stock futures rose, indicating the Nikkei 225 Stock Average will extend gains from a 23-month high when the market reopens after a holiday, amid speculation a weakening yen will boost export earnings.

American Depositary Receipts of Nissan Motor Co., which gets about 80 percent of sales overseas, climbed 2.2 percent. Billabong International Ltd. shares may move when they resume trading in Sydney after the surfwear maker received a takeover offer from VF Corp. and Altamont Capital Partners that matches a A$527 million ($556 million) bid from one of its directors.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,980 in Chicago yesterday, up from 10,830 at the close in Osaka, Japan, on Jan. 11. Japan’s financial markets were closed yesterday for a holiday. Futures were bid in the pre-market at 10,960 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index was little changed and New Zealand’s NZX 50 Index advanced 0.1 percent.

“Although the Japanese market has already risen 24 percent in local terms since Nov. 14, we believe Japanese equities still enjoy further upside given low valuations and prevalent underweight positions among global funds,” said Michael Kurtz, Hong-Kong based head of global equity strategy at Nomura Holdings Inc., Japan’s largest brokerage. Decisions on a new Bank of Japan governor and a proposed consumption tax increase “are likely to sustain further easing expectations, yen weakening, and other stimulus measures, to the support of Japanese equity prices.”

Election Boost

Japan’s Topix Index advanced 24 percent though Jan. 11 from Nov. 14, when elections were announced, on expectations a new government would call for more stimulus. The gauge is trading at 1.07 times book value, compared with 2.20 for the Standard & Poor’s 500 Index and 1.59 for the Stoxx Europe 600 Index. The Nikkei 225 closed at its highest level since February 2011 on Jan. 11.

The yen dropped to 89.53 per dollar today, the weakest level since June 2010. Speculation mounted that Prime Minister Shinzo Abe will select a central-bank chief who will expand monetary easing, accelerating the currency’s decline. A weaker yen boosts overseas income for exporters when repatriated.

The choice of a successor to BOJ Governor Masaaki Shirakawa, whose term ends in April, will be made after consultations with Yale Professor Emeritus Koichi Hamada and others, Abe said Jan. 13 on public broadcaster NHK’s “Sunday Debate” program. The BOJ meets next week.

Futures on the S&P 500 Index were little changed today. The cash gauge yesterday declined 0.1 percent from near a five-year high as Apple Inc.’s slump amid concern about iPhone sales offset a rally in Dell Inc.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. rose 0.7 percent to 102.05 yesterday in New York.

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