TOKYO, Oct 29 (Reuters) – Key TOCOM rubber futures eased off a one-week high hit earlier on Monday to close down 0.5 percent, tracking falls in crude oil and stocks, but hopes for further stimulus measures by the Bank of Japan limited losses.
The benchmark Tokyo Commodity Exchange rubber contract for April delivery settled down 1.3 yen at 258.2 yen per kg. The contract had earlier risen as high as 1.9 percent to 264.5 yen, its highest since Oct. 19, on hopes that the Bank of Japan will deliver more economic stimulus when it meets on Tuesday.
“Buying on short-covering has run its course. A strong gain may not occur even if the BOJ comes up with a further monetary easing policy,” said Kaname Gokon, analyst at trading house Okato Shoji Co.
Finance Minister Koriki Jojima said on Monday he wants the Bank of Japan to take bold policy steps while closely working with the government to beat deflation, piling pressure on the central bank to act on the eve of its rate review.
The most active Shanghai rubber contract for January delivery closed down 0.7 percent at 24,590 yuan per tonne.
The front-month December rubber contract on the SICOM in Singapore was last traded at 285 U.S. cents per kg, down 2 percent.
Oil slipped on Monday, with Brent near $109 a barrel, as refineries along the U.S. East Coast wind down operations ahead of approaching Hurricane Sandy, reducing crude use in the world’s largest oil consumer.
Asian shares also slipped as investors switched their focus away from signs of stable U.S. growth, looking instead at tepid global corporate earnings and the uncertain economic outlook.
In a possible negative sign for rubber, Japan’s Honda Motor Co cut its full-year net profit forecast by a fifth after sales in China, the world’s biggest autos market, were hit by a popular backlash against Japanese products in a dispute over East China Sea islands.
(Reporting by Yuko Inoue; editing by Miral Fahmy)
Source: Reuters
