Japan Stock Futures Climb Before Central Bank Meeting Concludes

Japanese stock futures climbed, indicating the Topix Index will extend its highest level since August 2008 before the Bank of Japan concludes a two-day policy meeting.

American Depositary Receipts of Sony Corp. rose 8.5 percent from the close of trading in Tokyo after Japan’s Nikkei newspaper reported the company’s board may discuss spinning off its entertainment division. ADRs of Honda Motor Co. gained 0.7 percent as exporters climbed amid forecasts the Bank of Japan will maintain stimulus plans as its meeting ends.

Futures on Japan’s Nikkei 225 Stock Average expiring next month traded at 15,460 in Chicago yesterday, up from 15,400 at the close in Osaka, Japan. They were bid in the pre-market at 15,480 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index retreated 0.1 percent and New Zealand’s NZX 50 Index gained 0.1 percent.

“It is a fairly big day ahead for the yen, with the BOJ set to hit the wires,” said Stan Shamu, a market strategist at IG Markets Ltd. in Melbourne, a trading services provider. “This is likely to be the key event in Asia today and will have an impact on the whole risk space. With no policy change expected, traders will be looking for comments regarding efforts to stabilize the bond market.”

Futures on Hong Kong’s Hang Seng Index and contracts on the Hang Seng China Enterprises Index of mainland Chinese companies trading in Hong Kong both retreated 0.3 percent. The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. dropped 1 percent in New York yesterday. The start of trading in Hong Kong will be delayed due to a “black” rainstorm warning issued by the city’s observatory.

Relative Value

The MSCI Asia Pacific Index, the benchmark regional equities gauge, surged 11 percent this year through yesterday as U.S. economic data improved and Japanese Prime Minister Shinzo Abe took steps to counter deflation.

That left the gauge trading at 14.2 times average estimated earnings compared with 15.2 for the Standard & Poor’s 500 Index and 13.6 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 gauge climbed 0.2 percent yesterday, to a record, after Federal Reserve Bank of St. Louis President James Bullard said the central bank should continue its bond buying to boost economic growth.

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