Tuesday 06 Jun 2023
By /
main news image

TOKYO (Feb 8): Benchmark Tokyo rubber futures climbed for a second session on Wednesday as investors looked for bargains after recent losses, while rising Shanghai futures and soft yen also lent support, dealers said.

"Higher Shanghai market prompted buys in Tokyo," said Toshitaka Tazawa, analyst, Fujitomi Co.

"Investors feel comfortable with the TOCOM staying at above 300 yen mark after taking profits last week amid lingering supply concerns," he added.

The Tokyo Commodity Exchange rubber contract for July delivery finished up 5.5 yen, or 1.8%, at 309.0 yen (US$2.75) per kg.

The most-active rubber contract on the Shanghai futures exchange for May delivery rose 445 yuan to finish at 20,725 yuan (US$3,010.70) per tonne.

Traders say Chinese investors are punting on global rubber demand surging on revived growth in China stoking the auto sector, allied with hope a President Trump stimulus will stoke the US economy.

Thailand's cabinet approved measures worth US$1 billion to help farmers in its flood-hit south, the commerce ministry said on Tuesday.

Persistent heavy rainfall, which started in December, triggered floods across south Thailand, cutting road and rail links while also hitting a main rubber-producing area. The floods are expected to hurt Thailand's rubber output by 7.6% this year, authorities stated.

"I expect rubber markets to remain in positive tone as there are still worries about tight supply in Thailand due to bad weather," Tazawa said.

The US dollar erased early modest gains against the yen and slipped 0.2% to 112.23 yen. But it remained above its overnight low of 111.59 yen, its deepest nadir since late November, as investors awaited a meeting of US-Japan leaders.

A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.

The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 222.9 US cents per kg, up 1.4 US cent.

(US$1 = 112.3000 yen)
(US$1 = 6.8838 Chinese yuan)


      Text Size