Japan Stock Futures Rise as Yen Weakens as BOJ Meets

Japanese stock futures rose as the yen weakened against the dollar and investors awaited the outcome of a two-day policy meeting by the Bank of Japan that concludes today.

American Depositary Receipts of Canon Inc., Japan’s largest camera maker, gained 1.5 percent as the yen weakened against the dollar. National Australia Bank Ltd. fell 0.6 percent in Sydney as Banco Santander SA, Spain’s largest lender, said it isn’t in talks to buy NAB’s U.K. assets. Advance Residence Investment, a Japanese real-estate investment trust, may fall after saying it will sell shares.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,795 in Chicago yesterday, up from 10,710 at the close in Osaka, Japan. They were bid in the pre-market at 10,800 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index advanced 0.2 percent and New Zealand’s NZX 50 Index fell 0.3 percent.

“Subdued news from the Bank of Japan could mute our current rally,” said Evan Lucas, a Melbourne-based market strategist at IG Markets Ltd., a provider of equities, currencies and commodities trading services. “Many investors expect no real surprise from the BOJ today.”

Japan’s Nikkei 225 Stock Average has risen in the last 10 weeks as a weaker currency boosts the earnings outlook for exporters amid optimism the new government led by Prime Minister Shinzo Abe will increase pressure on the central bank to do more to stimulate the economy. The yen weakened 0.3 percent to 89.86 per dollar at 7:57 a.m. in Tokyo. Japanese shares are currently moving in lockstep with the currency more than at any time during the past 24 years.

Inflation Target

The BOJ will today adopt Prime Minister Abe’s desired 2 percent inflation target, according to 21 of 23 economists surveyed by Bloomberg News. Ending consumer-price declines would give companies and households more incentive to borrow, helping the world’s third-biggest economy to pull out of a contraction.

The MSCI Asia Pacific Index, a benchmark regional equities gauge, traded at 14.3 times average estimated earnings compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

International investors are the most bullish on stocks in at least 3 1/2 years, with close to two-thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey.

Futures on the Standard & Poor’s 500 Index rose 0.2 percent. U.S. markets will reopen today following a public holiday.

(Corrects final paragraph to show U.S. futures rose.)
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