TOKYO, Oct 26 (Reuters) – Benchmark Tokyo rubber futures skidded on Monday as selling pressure gathered momentum ahead of an expiry of a nearby contract, offsetting earlier gains helped by higher Tokyo equities and softer yen in the wake of China’s monetary easing. The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery JRUc6 0#2JRU: finished 1.2 yen, or 0.7 percent, lower at 164.5 yen ($1.36) per kg. The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, rose in early trade to as high as 167.4 yen on the back of China’s surprise rates cut. China’s central bank lowered rates on Friday for the sixth time in less than a year, and it again lowered the amount of cash that banks must hold as reserves in a bid to jump start growth in its stuttering economy.
Japan’s Nikkei share average climbed to a fresh two-month high on Monday after China’s rate cut lifted risk appetites while the greenback brushed a two-month peak of 121.60 yen JPY= . .T FRX/ “But in late trade, traders scrambled to roll over their positions before an expiration of the October contract.That dragged down the market,” said Hiroyuki Kikukawa, general manager at Nihon Unicom Inc.
The October contract expired at 149.7 yen, down 1.4 yen, on Monday.”Tokyo equities gained because of China’s monetary policy, not because of higher economic growth.Therefore the support from China’s rate cut may be short-lived,” Kikukawa said.
The most-active rubber contract on the Shanghai futures exchange for January delivery SNRcv1 dropped 195 yuan to finish at 10,980 yuan ($1,728.67) per tonne. The front-month rubber contract on Singapore’s SICOM exchange for November delivery STFc1 last traded at 122.8 U.S. cents per kg, down 3.0 cent.
($1 = 120.9500 yen) ($1 = 6.3517 Chinese yuan renminbi)
(Reporting by Yuka Obayashi; Editing by Anand Basu)
