Japan Stock Futures Rise as Yen Weakens, Oil Falls; Sony Gains

By Masaki Kondo

July 24 (Bloomberg) -- Japan's stock futures rose after the weaker yen and a drop in oil prices sparked optimism that Japanese companies' overseas sales will weather a global slowdown.

U.S.-traded receipts of Sony Corp. climbed 1.2 percent from the closing share price in Tokyo yesterday. Toyota Motor Corp. advanced 1.9 percent after saying demand in emerging markets drove up vehicle sales and crude prices fell to a near seven-week low. Mizuho Financial Group Inc. rose 3 percent after U.S. lawmakers approved a rescue plan for embattled mortgage lenders Fannie Mae and Freddie Mac.

``The weaker yen will likely prompt investors to buy exporters, pushing up the market,'' said Juichi Wako, a strategist at Nomura Holdings Inc., in an interview with Bloomberg Television. ``The approval of the rescue plan will help improve investor sentiment.''

Nikkei 225 Stock Average futures expiring in September last traded at 13,495 in Chicago, 1 percent higher than the close of 13,360 in Osaka and 0.9 percent up from 13,370 in Singapore yesterday. The Bank of New York Japan ADR Index, which tracks American depositary receipts of Japanese companies, gained 0.4 percent.

The Nikkei climbed 1 percent to 13,312.93 in Tokyo yesterday. The broader Topix index advanced 1.2 percent to 1,303.35.

The yen depreciated to as much as 107.97 in New York from 107.34 at the close of stock trading in Tokyo yesterday. A weaker yen boosts the value of Japanese companies' repatriated overseas sales. A 1 yen change against the dollar alters Sony's annual operating profit by 4 billion yen ($37 million), according to the company.

Oil, Toyota

Crude oil extended its decline to a second day, falling 3.1 percent to $124.44 a barrel, the lowest close since June 4. Gold sank 2.7 percent, the biggest drop since June 10, as falling fuel costs reduced demand for the precious metal as an inflation hedge.

Toyota, the world's biggest automaker by market value, yesterday said preliminary second-quarter sales increased about 2 percent on rising demand in China and other emerging markets.

Meanwhile, U.S. lawmakers yesterday reached a deal on legislation that authorizes Treasury Secretary Henry Paulson to bail out Fannie Mae and Freddie Mac, the biggest U.S. mortgage lenders. Japan's three biggest lenders, including Mizuho, held a total of 4.7 trillion yen in debt securities issued by U.S. government-backed mortgage financers as of March 31, according to the banks.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.