Japan's Stock Futures Fall as Asset-Writedown Concerns Reemerge

By Masaki Kondo

Aug. 13 (Bloomberg) -- Japan's stock futures fell after new asset writedowns by global financial companies rekindled concern turmoil in the U.S. housing market will linger.

U.S.-traded receipts of Sumitomo Mitsui Financial Group Inc., Japan's third-biggest publicly traded bank, retreated 2.6 percent from the closing share price in Tokyo yesterday, after JPMorgan Chase & Co. reported an additional $1.5 billion loss on mortgage- backed assets. Nomura Holdings Inc., the nation's largest brokerage, declined 1.4 percent.

Nikkei 225 Stock Average futures expiring in September closed at 13,260 in Chicago yesterday, 0.4 percent lower than 13,310 earlier in Osaka and 0.5 percent down from 13,325 in Singapore. The Bank of New York Japan ADR Index, which tracks American depositary receipts of Japanese companies, slid 0.8 percent.

``The market will open bearish and is likely to be stagnant,'' Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television.

The Nikkei fell 1 percent to 13,303.60 in Tokyo yesterday. The broader Topix index dropped 0.7 percent to 1,271.42.

Trading conditions ``have substantially deteriorated,'' JPMorgan said in a regulatory filing yesterday when it announced new writedowns since July, adding to $14 billion already reported. The second-largest U.S. bank by value expects the global economy ``to continue to be weak.''

JPMorgan's comments coincided with UBS AG's prediction that ``adverse economic and financial trends'' won't improve for the rest of the year. The Zurich-based bank yesterday posted a fourth straight quarterly loss on U.S. mortgage-related writedowns, pushing up worldwide losses from the collapse of the U.S. housing market to more than $500 billion.

At 8:50 a.m., the Cabinet Office is scheduled to release a report on Japan's gross domestic product. The world's second- largest economy probably shrank an annualized 2.3 percent in the three months ended June 30, according to economist estimates.

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