Japan Stocks Poised to Fall From Four-Year High; Nikon ADRs Drop

Japanese stock futures fell, indicating the Nikkei 225 Stock Average will decline from its highest level in four years, amid concern equities rallied too far, too fast. Australian shares were little changed.

American Depositary Receipts of Nikon Corp. slumped 12 percent after saying falling camera prices that prompted it to cut its annual profit forecast will probably continue this quarter amid slowing demand in Europe and China. ADRs of Mazda Motor Corp., the best performer on the Nikkei 225 Stock Average in the past three months, soared 9 percent as the carmaker more than doubled its full-year profit forecast. National Australia Bank Ltd. gained 1.1 percent in Sydney as the lender reported an increase in first-quarter profit.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 11,415 in Chicago yesterday, down from 11,430 at the close in Osaka, Japan. They were bid in the pre-market at 11,400 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index both rose less than 0.1 percent.

“We don’t think a correction will be long and sustained,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which has about $126 billion under management. “But we have had a strong rally in a short space of time, so a correction isn’t unexpected. We are holding on to our position. We have some fundamental support and now we’re seeing some genuinely good earnings numbers.”

Asia Rally

Japanese shares have paced a rally among developed markets in Asia. Bank of Japan Governor Masaaki Shirakawa’s earlier than expected departure from the job has accelerated a leadership transition that may aid Prime Minister Shinzo Abe’s campaign for aggressive easing that has helped the yen weaken against all major currencies since mid-November, driving the broader Topix Index up 34 percent through yesterday since elections were announced Nov. 14.

Japan’s Cabinet Office is due to report machinery orders for December before equity markets open today. Orders are an indicator of capital spending.

Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 0.1 percent yesterday as better-than-estimated earnings overshadowed concern over Europe’s debt crisis before a gathering of euro-area leaders.

The MSCI Asia Pacific Index, the benchmark Asian equities gauge, traded at 14.8 times average estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and a multiple of 12.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Sony Earnings

Sony is among companies due to report earnings today. Of the 252 companies on the MSCI Asia Pacific index that have reported earnings so far this quarter and for which Bloomberg has estimates, 52 percent have exceeded profit expectations. Some 53 percent have missed sales projections, the data compiled by Bloomberg show.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. climbed 0.1 percent to 97.79 in New York yesterday.

Tom DeMark, the creator of indicators to show turning points in securities, said China’s Shanghai Composite Index will retreat about 8 percent before resuming gains as a surge in Chinese stocks has exhausted buyers. The gauge of domestic Chinese equities climbed 24 percent through yesterday from an almost four-year low reached in December.

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