Japanese Stock Futures Rise on Yen
Japanese stock futures rose as a weaker yen boosted the earnings outlook for companies dependent on overseas demand. Australian stocks fell after oil prices declined.
New York-traded securities of Canon Inc., a camera maker that gets 28 percent of its sales from the Americas, climbed 0.8 percent from the Tokyo close after the yen dropped to its lowest level since January against the dollar. Those of Advantest Corp., the world’s largest maker of memory-chip testers, gained 2 percent after U.S.-based Qualcomm Inc. raised forecasts. BHP Billiton Ltd., Australia’s largest oil company, sank 1 percent.
“If the yen stays at this level, pretax earnings at Japanese companies will more likely increase by 50 percent next fiscal year,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo. “That’ll be positive for the stock market.”
Japan’s fiscal year starts April 1.
Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 10,825 in Chicago yesterday, 0.5 percent higher than 10,775 in Singapore. They were bid in the pre-market at 10,830 as of 8:07 a.m. in Osaka, Japan.
Australia’s S&P/ASX 200 Index fell 0.2 percent to 4,874.60 as of 10:07 a.m. in Sydney. New Zealand’s NZX 50 Index dipped 0.1 percent in Wellington.
The MSCI Asia Pacific Index has lost 1.3 percent this week, set for its first weekly slump in five, after an interest-rate increase by India’s central bank spurred concern governments and central banks globally will unwind stimulus measures that helped pull the world’s economy out of recession. Stocks in the gauge trade at 18.8 times estimated earnings, compared with 15.1 times for the MSCI World Index of 23 developed nations.
U.S. Stocks Fall
Futures on the Standard & Poor’s 500 Index retreated 0.2 percent. Yesterday, the index fell 0.2 percent, as discord deepened among European leaders about how to rescue debt- stricken Greece.
The yen depreciated to 92.96 against the dollar around 2:40 a.m. in Tokyo, its weakest level since Jan. 8. It dropped to as low as 123.90 per euro from 122.44 at the 3 p.m. close of stock trading. A weaker yen boosts the value of overseas sales at Japanese companies when converted into their home currency.
Crude oil for May delivery fell 0.1 percent to $80.53 a barrel yesterday in New York.
‘Very, Very Bad’
European Central Bank President Jean-Claude Trichet said on a French television station yesterday that Europe needs to take responsibility for its members and that possible International Monetary Fund aid for Greece is “very, very bad.”
French President Nicolas Sarkozy bowed to German Chancellor Angela Merkel’s demand for an IMF role in a potential rescue package for Greece.
Qualcomm, the world’s biggest maker of mobile-phone chips, jumped 5 percent in New York after boosting its second-quarter profit and sales forecasts.
PetroChina Co., the world’s biggest company by market value, posted a smaller full-year profit than analysts estimated after oil prices fell from a record. Net income declined 9.7 percent, the company said yesterday after the close of the Hong Kong stock market.
Friday, March 26, 2010
U.S. Stock Futures Inch Higher Ahead of GDP Data
U.S. stock futures were slightly higher Friday as investors awaited the latest reading of fourth-quarter U.S. economic growth.
Over two hours before the start of trading, Dow Jones Industrial Average futures gained 27 points. The S&P 500 futures rose 2.7 points to 1165.40 and Nasdaq 100 futures gained 4.25 points to 1953.75. Changes in futures don't always accurately predict early market moves after the opening bell.
U.S. markets ended mixed Thursday after an early rally evaporated, as a strengthening dollar sapped gains in commodities and related shares, and further weak demand for Treasury notes also weighed. The Dow Jones Industrial Average closed up around five points, while the S&P 500 fell 1.99 points and the Nasdaq declined 1.35 points.
Investors will be focused Friday on revised fourth-quarter gross domestic product. Economists polled by MarketWatch expect growth to be cut to 5.7% from 5.9%.
Consumer sentiment for March from the University of Michigan will also be closely watched. Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said consumer sentiment likely will lag other indicators of economic improvement until the labor market improves. "A sustained improvement in household attitudes generally does not occur until the unemployment rate enters a noticeable downtrend—something we expect to become more apparent over the next couple of months," he said in a note to clients.
The dollar lost ground against the euro, reversing gains from the previous session, when it hit a ten-month high against the European currency after euro-zone members announced a plan to support debt-burdened Greece, if needed, through bilateral loans and the International Monetary Fund. In recent trading, the euro was up 0.5% at $1.3376.
In commodities, oil prices edged higher, with the May-dated light crude contract gaining 41 cents at $80.94 a barrel in electronic trading.
European markets were subdued, with Germany's DAX 30 Index dipping 0.2%, while many Asian markets posted strong gains, with Japan's Nikkei 225 Average jumping 1.5%.
U.S. stock futures were slightly higher Friday as investors awaited the latest reading of fourth-quarter U.S. economic growth.
Over two hours before the start of trading, Dow Jones Industrial Average futures gained 27 points. The S&P 500 futures rose 2.7 points to 1165.40 and Nasdaq 100 futures gained 4.25 points to 1953.75. Changes in futures don't always accurately predict early market moves after the opening bell.
U.S. markets ended mixed Thursday after an early rally evaporated, as a strengthening dollar sapped gains in commodities and related shares, and further weak demand for Treasury notes also weighed. The Dow Jones Industrial Average closed up around five points, while the S&P 500 fell 1.99 points and the Nasdaq declined 1.35 points.
Investors will be focused Friday on revised fourth-quarter gross domestic product. Economists polled by MarketWatch expect growth to be cut to 5.7% from 5.9%.
Consumer sentiment for March from the University of Michigan will also be closely watched. Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said consumer sentiment likely will lag other indicators of economic improvement until the labor market improves. "A sustained improvement in household attitudes generally does not occur until the unemployment rate enters a noticeable downtrend—something we expect to become more apparent over the next couple of months," he said in a note to clients.
The dollar lost ground against the euro, reversing gains from the previous session, when it hit a ten-month high against the European currency after euro-zone members announced a plan to support debt-burdened Greece, if needed, through bilateral loans and the International Monetary Fund. In recent trading, the euro was up 0.5% at $1.3376.
In commodities, oil prices edged higher, with the May-dated light crude contract gaining 41 cents at $80.94 a barrel in electronic trading.
European markets were subdued, with Germany's DAX 30 Index dipping 0.2%, while many Asian markets posted strong gains, with Japan's Nikkei 225 Average jumping 1.5%.
FOREX-Euro gains on Greece plan
The euro lifted off a 10-month low against the dollar on Friday after euro zone leaders agreed on a safety net for Greece, though uncertainties remained over how Athens's debt burden would be managed in practice.
Euro zone leaders agreed a package under which Greece would receive both bilateral loans from euro zone partners and International Monetary Fund funding if it faced severe difficulties. [ID:nLDE62N2R1]
But the plan did not alleviate longer-term worries about Greece and other fiscally vulnerable economies, such as Portugal and Spain, limiting euro gains. It only offers Athens funding as a last resort and only with unanimous euro zone approval.
"This buys the euro a bit of time, but nothing fundamental has changed and Greece still has to roll over its debt," CMC Markets analyst Michael Hewson said.
"The fact that the IMF has had to be called in to make it more acceptable to Germany suggests the euro has a long way to go before it becomes a reserve currency."
Athens is saddled with borrowing costs more than double those of Germany and must borrow some 16 billion euros ($21.3 billion) between April 20 and May 23 to refinance maturing debt.
At 1127 GMT, the euro EUR= was up 0.9 percent against the dollar at $1.3393, recovering after hitting its weakest level since early May at $1.3267 on trading platform EBS.
Concerns about Greece's fiscal health have caused the single currency to lose around 12 percent of its value versus the dollar since early December, when it was trading above $1.51.
Hewson said the previous support around $1.3480 -- the 61.8 percent retracement of last year's move from the March lows below $1.30 to the December highs -- had become a significant resistance level.
A weekly close below here would "reinforce a downside trend in euro/dollar, potentially taking it down towards $1.3000".
DOUBTS ON GREECE DEAL
Traders said investors were encouraged after European Central Bank President Jean-Claude Trichet said the aid mechanism was "workable" although it was unlikely ever to be activated. [ID:nLDE62O2MJ]
Some analysts said the IMF's involvement could speed up Greece's fiscal reconstruction, although others said the deal's extremely strict conditions could harm the Greek economy.
"Going forward the market will be focusing more on whether Greece will be able to deliver the austerity measures it has promised," said Johan Javeus, currency strategist at SEB in Stockholm..
Against the yen, the euro rose EURJPY=R around 0.8 percent to touch a one-week high of 124.02 yen, while it gained 0.6 percent against sterling EURGBP=D4 to 90.12 pence.
The dollar index .DXY, a measure of its performance against six other major currencies, fell 0.5 percent to 81.692, still close to a 10-month high of 82.877 after gaining sharply in the past few days on higher U.S. yields.
The dollar struck its highest level since early January against the yen on Thursday at 92.96 yen JPY=, boosted by a rising differential between U.S. and Japanese yields, but trickled back on Friday to trade down 0.2 percent at 92.54.
The euro lifted off a 10-month low against the dollar on Friday after euro zone leaders agreed on a safety net for Greece, though uncertainties remained over how Athens's debt burden would be managed in practice.
Euro zone leaders agreed a package under which Greece would receive both bilateral loans from euro zone partners and International Monetary Fund funding if it faced severe difficulties. [ID:nLDE62N2R1]
But the plan did not alleviate longer-term worries about Greece and other fiscally vulnerable economies, such as Portugal and Spain, limiting euro gains. It only offers Athens funding as a last resort and only with unanimous euro zone approval.
"This buys the euro a bit of time, but nothing fundamental has changed and Greece still has to roll over its debt," CMC Markets analyst Michael Hewson said.
"The fact that the IMF has had to be called in to make it more acceptable to Germany suggests the euro has a long way to go before it becomes a reserve currency."
Athens is saddled with borrowing costs more than double those of Germany and must borrow some 16 billion euros ($21.3 billion) between April 20 and May 23 to refinance maturing debt.
At 1127 GMT, the euro EUR= was up 0.9 percent against the dollar at $1.3393, recovering after hitting its weakest level since early May at $1.3267 on trading platform EBS.
Concerns about Greece's fiscal health have caused the single currency to lose around 12 percent of its value versus the dollar since early December, when it was trading above $1.51.
Hewson said the previous support around $1.3480 -- the 61.8 percent retracement of last year's move from the March lows below $1.30 to the December highs -- had become a significant resistance level.
A weekly close below here would "reinforce a downside trend in euro/dollar, potentially taking it down towards $1.3000".
DOUBTS ON GREECE DEAL
Traders said investors were encouraged after European Central Bank President Jean-Claude Trichet said the aid mechanism was "workable" although it was unlikely ever to be activated. [ID:nLDE62O2MJ]
Some analysts said the IMF's involvement could speed up Greece's fiscal reconstruction, although others said the deal's extremely strict conditions could harm the Greek economy.
"Going forward the market will be focusing more on whether Greece will be able to deliver the austerity measures it has promised," said Johan Javeus, currency strategist at SEB in Stockholm..
Against the yen, the euro rose EURJPY=R around 0.8 percent to touch a one-week high of 124.02 yen, while it gained 0.6 percent against sterling EURGBP=D4 to 90.12 pence.
The dollar index .DXY, a measure of its performance against six other major currencies, fell 0.5 percent to 81.692, still close to a 10-month high of 82.877 after gaining sharply in the past few days on higher U.S. yields.
The dollar struck its highest level since early January against the yen on Thursday at 92.96 yen JPY=, boosted by a rising differential between U.S. and Japanese yields, but trickled back on Friday to trade down 0.2 percent at 92.54.
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