Japan futures rebound on China stimulus optimism

SINGAPORE, Oct 14 (Reuters) –

Japanese rubber futures snapped two straight sessions of losses on Monday, as prospects of further fiscal stimulus from China following a key government briefing over the weekend lifted market sentiment.
The March Osaka Exchange (OSE) rubber contract JRUc6, 0#2JRU: closed up 7.5 yen, or 1.94%, at 393.9 yen ($2.64) per kg.
The January rubber contract on the Shanghai Futures Exchange (SHFE) SNRv1 rose 230 yuan, or 1.28%, to finish at 18,180 yuan ($2,567.62) per metric ton.
Mixed sentiment prevailed in natural rubber markets after the much-awaited conference by China’s finance ministry on Saturday, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.
The briefing disappointed market participants who were expecting immediate fiscal stimulus, while others found a positive in the ministry’s confirmation of massive policy stimulus despite unclear details, said Jacob.
Natural rubber also received some support from butadiene rubber prices, said Jacob.
China pledged on Saturday to “significantly increase” debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package, a vital detail to gauge the longevity of its recent stock market rally.
The finance ministry promised significant increases to government debt and support for consumers and the property sector, while remaining low on measurable details.
On Sunday, official data showed the country’s consumer inflation unexpectedly eased in September, while producer price deflation deepened, heightening pressure on Beijing to roll out more stimulus measures quickly to revive flagging demand and shaky economic activity.
The most-active November butadiene rubber contract on the SHFE SHBRv1 climbed 325 yuan, or 2.1%, to 15,825 yuan ($2,235.01) per metric ton.
The front-month November rubber contract on Singapore Exchange’s SICOM platform STFc1 last traded at 197.6 U.S. cents per kg, down 0.2%.

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