Tokyo rubber futures rose by their daily limit on Tuesday, buoyed by firming oil and other commodities prices, as crude oil drove to fresh record highs and other commodities also gained. The benchmark Tokyo Commodity Exchange rubber contract for February 2008 delivery stood at 255.2 yen per kg, up 10 yen or 4.1 percent from Friday's close.
The market was closed on Monday. Cash gold reached a 16-month high on Monday, supported by expectations of a US interest rate cut that could lift bullion's appeal. The US central bank will meet later in the day and experts expect it to agree to cut its benchmark federal funds rate by at least a quarter percentage point to help cushion the world's biggest economy from the impact of the credit squeeze and housing market slowdown.
US crude hit a record over $81 a barrel on Tuesday on worries that global energy supplies could shrink to critical levels this winter due to strong demand growth. Bullish energy prices tend to prompt a shift to natural rubber from synthetic rubber a petrochemical product. The dollar was flat from late US trade near 115.00 yen. Physical rubber was expected to be supported by tight supplies in producing countries.
Last week's data showed rubber inventories in Shanghai warehouses rose to 73,805 tonnes by September 13, up 3 percent from a week earlier and rising for the second week in a row. Despite the recent recovery in rubber stocks, dealers have said China, the world's biggest rubber consumer, was interested in buying nearby shipments.
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