Tokyo rubber futures inch higher after China stimulus

TOKYO, March 1 (Reuters) – Benchmark TOCOM rubber futures edged higher on Tuesday after top consumer of the commodity China cut its reserve ratio for banks in an effort to revive flagging growth.

FUNDAMENTALS

The Tokyo Commodity Exchange rubber contract for August delivery JRUc6 0#2JRU: was up 0.4 yen, or 0.3 percent, at 155.5 yen ($1.38) per kg as of 0024 GMT, after sliding 0.5 yen the previous day.It marked its third straight month of falls in February.

China’s central bank resumed its easing cycle on Monday, injecting an estimated $100 billion worth of long-term cash into the economy to cushion the pain from job layoffs and bankruptcies in industries plagued by overcapacity.

Japan is laying the groundwork for new government spending to pre-empt any weakness in household consumption, and could set an early example after the Group of 20 nations called for more fiscal spending to help support the ailing global economy.

MARKET NEWS

Oil prices jumped 3 percent on Monday after China’s move to boost its economy, a drop in crude output from OPEC and the U.S., and a pledge by Saudi Arabia to limit market volatility, suggesting a 20-month selloff could be hitting a bottom. O/R

The yen was broadly firmer early in Asia on Tuesday, having powered to a two-year high on the euro as nervous investors sought the safe-haven Japanese currency even as China took fresh steps to stimulate its economy.

The dollar fetched 112.34 yen JPY= , erasing Friday’s 0.9-percent gain. FRX/

Japan’s benchmark Nikkei stock average (XC0009692440) was down 0.3 percent in Tuesday trade, after Wall Street sold off into the close and the global stocks gauge posted its fourth straight month of declines. MKTS/GLOB

DATA/EVENTS (GMT)

The following data is expected on Tuesday: (Time in GMT)