Benchmark Tokyo rubber futures rose in thin trade on Thursday, as investors covered short after Tokyo stock market extended gains, but trade was thin due to an absence of speculators as Chinese financial markets were closed for holiday, dealers said. The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery finished 4.2 yen, or 2.5 percent, higher at 169.3 yen ($1.41) per kg.
"The market got a boost by higher Nikkei index and weaker yen in early trade, but trade became very quite after that," said Kaname Gokon, Strategist at Okato Shoji Co. The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 124.0 US cents per kg, up 2.2 cent. Chinese financial markets will remain shut until October 7.
Japanese stocks rose on Thursday, taking comfort from surveys showing contractions in China's manufacturing activity may have bottomed out and on pockets of strength among Japanese firms despite the crunch felt by weak external demand. Growth in China's services industry steadied in September, an official survey showed on Thursday, helping offset persistent weakness in manufacturing which has been weighing heavily on the world's second-largest economy. The dollar was buying 120.15 yen, up about 0.3 percent from late US trading, as the safe-haven yen came under pressure as global stock markets edged higher after their worst quarterly performance in four years.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been traded within a narrow range of 162-180 yen over the past month, after falling rapidly from this year's high of 247.9 yen hit in early June. "Although the prices have been hovering at lows, the market's upside is fairly limited because of concerns over oversupply in Asia," Gokon said.
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