Japan's Nikkei Futures Climb After Yen Weakens; Tankan in Focus

By Patrick Rial


Dec. 14 (Bloomberg) -- Japan's Nikkei 225 Stock Average futures rose in Chicago after the yen weakened against the dollar, boosting the value of sales for companies including Nintendo Co.

Investors will closely monitor the Bank of Japan's quarterly Tankan survey set to be released 10 minutes before the start of trading. Confidence among large manufacturers probably fell for the first time since March, according to economists surveyed by Bloomberg News.

``The yen is relatively weak, which should help out the automakers and electronics manufacturers,'' said Soichiro Monji, who helps oversee $47 billion at Daiwa SB Investments Ltd. in Tokyo. ``The market knows that business confidence is worsening, but the point is to what degree, and that's what we'll be looking for today.''

Nikkei 225 futures expiring in December closed in Chicago yesterday at 15,685, up from 15,570 in Osaka and 15,550 in Singapore yesterday. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, fell 2.9 percent.

Yesterday, the Nikkei slid 2.5 percent to 15,536.52 and the Topix index plunged 2.6 percent to 1,516.10. It was the biggest drop for both gauges since Aug. 17.

The settlement price for December Nikkei 225 options and futures, also known as the ``special quotation,'' will be set today after all stocks in the index begin trading.

Weaker Yen

U.S.-traded receipts of Nintendo, the maker of the top- selling Wii game console, climbed 0.5 percent from the closing share price yesterday. Those of Sony Corp., the world's No. 2 maker of consumer electronics, rose 0.3 percent. Receipts of Nissan Motor Co., Japan's third-biggest automaker, added 0.3 percent.

The yen recently weakened to 112.31 against the dollar from 111.72 at the close of trading yesterday. A weaker yen increases the value of Japanese exporters' dollar-denominated sales when converted back into local currency.

The Bank of Japan's quarterly Tankan index of sentiment among large manufacturers fell to 21 points in December, the lowest since June 2006, from 23 in September where it has held all year, according to economists.

Nissan is in talks with Chrysler LLC and the two carmakers may work together to develop new vehicles, people familiar with the discussions said.

Insurance companies may fall after Tatsuya Kubo, a Tokyo- based analyst at Merrill Lynch & Co., reduced his recommendation on four of them. Sompo Japan Insurance Inc., the nation's third- biggest property and casualty insurer, was lowered one notch to ``neutral'' while Aioi Insurance Co., another P&C insurer, was cut two levels to ``sell'' from ``buy.''

Nippon Oil Corp., Japan's largest refiner, Inpex Holdings Inc. and Japan Petroleum Exploration Co., the country's biggest oil explorers, may rise. The companies are in talks to build an oil refinery in Libya at a cost of up to 500 billion yen ($4.45 billion), the Nikkei newspaper reported.