Tokyo rubber futures rose more than 1 percent on Tuesday, in response to a weaker yen, after rising to a one-year high late last week. The key Tokyo Commodity Exchange rubber contract for March delivery was at 217.4 yen per kg, up 2.1 yen or about 1 percent from the previous settlement on Friday, after earlier rising to a high of 217.7 yen.
Monday was a national holiday in Japan. The contract rose as high as 219.0 yen on Friday, the highest for any benchmark since October 2008. "I think it was mostly the yen behind TOCOM rubber's rise today," a Tokyo broker said. The dollar edged up about 0.1 percent to 89.90 yen from late US trading on Monday.
US crude futures edged down on Tuesday but remained above $73 per barrel. They rose for a third day in a row to settle at a seven-week high on Monday on a weaker dollar and optimism about the pace of global economic recovery. Thailand, the world's biggest rubber exporter, plans to expand cultivation with a further 160,000 hectares of rubber plantation starting next year, Thailand's deputy agriculture minister said on Tuesday.
The broker said the news could be bearish for the market long-term, but there was unlikely to be much immediate impact. "You have to procure the land, cultivate it, plant trees, and then it takes some six or seven years for all of this to lead to rubber production," the broker said. In industry-related news, Malaysia - the world's third largest rubber producer - expects output to rise by 50 percent to as high as 1.5 million tonnes by 2020 as it introduces plants cloned for higher yields and better harvesting methods.
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