Japan Stock Futures Rise as U.S. Retail Sales Top Forecasts

Japanese stock index futures rose, indicating the Nikkei 225 Stock Average will rebound from its first two-day slide in two weeks, as faster-than-forecast growth in U.S. retail sales bolstered optimism in the global recovery.

American Depositary Receipts of Seiko Epson Corp. gained 6.6 percent after the printer maker forecast profit will grow 67 percent by 2015 from its forecast for this year. Chiyoda Corp. may be active after the Nikkei newspaper reported the engineering firm’s estimate for full-year profit, below analysts’ estimates. Myer Holdings Ltd. advanced 4.8 percent after profit at Australia’s largest department-store company topped forecasts.

Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 12,260 in Chicago yesterday, up from 12,200 at the close in Osaka, Japan. They were bid in the pre-market at 12,260 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index advanced 0.1 percent before the release of employment data at 11:30 a.m. local time. New Zealand’s NZX 50 Index rose 0.4 percent.

“I am confident that economic growth, and the stock market, will be better in the long term,” said Shigeru Oshita, Tokyo-based fund manager at Sumitomo Mitsui Trust Bank, which has $790 billion in assets under management. “We can expect more of the same pro-growth policies from Abe. To succeed in winning the upper house elections in July, he must create a feel-good factor.”

BOJ Leadership

Japan’s lower house will today vote on Bank of Japan nominees. Two opposition parties said they will support Kikuo Iwata for BOJ deputy governor, reducing the risk that Prime Minister Shinzo Abe will fail to win confirmation for all three of his central bank appointments. Abe needs opposition lawmakers to secure the new central bank leadership team, as the ruling coalition lacks an upper house majority.

U.S. Commerce Department data showed sales at U.S. retailers rose 1.1 percent in February, the most in five months and more than twice the median estimate of economists. Industrial production declined 0.4 percent in January in the 17-nation euro area, exceeding a 0.1 percent decline forecast by economists, and adding to signs that the region’s recession extended into the first quarter.

Japan’s Topix Index rallied 43 percent since elections were announced on Nov. 14 amid optimism a new government will do more to beat deflation and press the central bank to expand monetary easing policies.

The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded yesterday at 14.7 times average estimated earnings compared with 14.1 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index were little changed. The Dow Jones Industrial Average extended its longest rally since 1996 yesterday following the release of the retail sales data.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 1 percent in New York yesterday.

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