Japan Stock Futures Gain as Yen Weakens; Honda ADRs Rise

Japanese stock futures rose, indicating the Nikkei 225 Stock Average will rebound after yesterday dropping the most since May.

American Depositary Receipts of Honda Motor Co. climbed 1.8 percent as the yen weakened against the dollar and Morgan Stanley advised buying the carmaker’s shares. Boral Ltd. gained 1.7 percent in Sydney as Macquarie Group Ltd. raised its rating on the building materials supplier after it announced jobs cuts.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,635 in Chicago yesterday, up from 10,580 at the close in Osaka, Japan. They were bid in the pre-market at 10,630 in Osaka at 8:05 a.m. Australia’s S&P/ASX 200 Index gained 0.1 percent and New Zealand’s NZX 50 Index advanced 0.3 percent.

The yen tumbled 5.5 percent over the past month against a basket of developed market currencies tracked by Bloomberg Correlation-Weighted Indexes amid speculation Bank of Japan Governor Masaaki Shirakawa and his fellow board members will raise its 1 percent inflation goal at a policy meeting on Jan. 21-22. Prime Minister Shinzo Abe has called for the target to be doubled.

The Nikkei 225 plunged 2.6 percent yesterday, the steepest decline since May 18, as the yen strengthened. The benchmark climbed 22 percent since Nov. 14, when the announcement of elections fanned speculation a new government would pressure the Bank of Japan to add stimulus.

The yen weakened 0.2 percent to 88.56 per dollar today.

Relative Value

The MSCI Asia Pacific Index, the regional equities benchmark, traded at 14.1 times estimated earnings, compared with 13.3 for the Standard & Poor’s 500 Index and 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg News.

Futures on the S&P 500 Index fell 0.1 percent today. Most U.S. stocks fell yesterday as a cut in the World Bank’s growth forecasts offset a rally in Apple Inc.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 0.6 percent to 100.88 yesterday in New York.

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