Japanese stock futures went ahead as there is optimism in the market that corporate earnings are improving after the monetary easing policy of Bank of Japan was able to weaken Yen. Futures on Japan’s Nikkei 225 Stock Average which is scheduled to expire in June closed at 13,985, better than 13,929 in Japan. In pre-market, there were bid at 14,010 in Osaka, Japan. The futures on the S&P/ASX 200 Index of Australia went ahead by 0.2% on today. The NZX 50 Index of New Zealand increased by 0.3% as well. Incidentally, yesterday being a National Holiday, markets of both Australia and New Zealand were closed.
American depositary receipts of Sony Corp. increased by 5% from the closing share price in Tokyo as the No.1 exporter of consumer electronics reported the very 1st full year profit for the same in last 5 years as the weaker Yen was able to boost the overseas revenues. The top producer of excavators in the world, Komatsy’s ADRs increased by 3%. As far ADRs of BHP Billiton Ltd. are concerned, those increased by 2% after crude capped the longest rally of the same in 9 months. BHP Billiton Ltd. is the biggest oil producer of Australia.
According to the portfolio manager of Pengana Capital Ltd., Tim Schroeders, if the Bank of Japan decides to carry out the intended policy over the next 2 years at least in terms quantitative easing and stimulating the economy, some substantial uplift should be experienced. He added that bond purchases are generally known as indication of quantitative easing. He added that still the question remains that how effective the policy will be in terms of global economy.
It is currently being weighed in by the investors that how decline in Yen will be improving the earnings outlook for the Japanese exporters. Since 4th April, Yen has declined against most of its major counterparts. On that very same day, the Central Bank of Japan stated that it will be doubling the amount of money being circulated in the economy by end of 2014 as it will be buying Government bonds in the boldest round of quantitative easing, in the last few months.
Futures on the Standard & Poor’s 500 Index were more or less unchanged on today. The index increased by 0.4% on yesterday as earnings of Cliffs Natural Resources and United Parcel Services topped estimates.