Benchmark Tokyo rubber futures surged to a 1-1/2-week high on Wednesday on the back of higher oil prices and the yen's fall against the US dollar. The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery finished 4.6 yen, or 2.8 percent, higher at 170.6 yen ($1.66) per kg, near a four-month high of 170.9 yen hit on September 23.
"Firmer oil prices and lower yen prompted a string of buying," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. Oil prices rose in early trading after a report that US fuel inventories may have fallen for a fifth straight week, but contracts remained near the $50 marker where many traders currently see fair value for crude. The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 143.1 US cents per kg, up 3.3 cents.
The US dollar was slightly lower at 102.86 yen in late Asian trade after rising to a three-week high of 102.965 the previous day, when it posted its sixth straight session of gains versus its Japanese peer. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies. "The TOCOM may gain further tomorrow, but investors will likely take profits before the three-day weekend in Japan," he added. Chinese markets remained closed for National Day holidays. Japanese markets will be closed on Monday for a public holiday. A flurry of data from China, the world's top rubber buyer, in the coming weeks is expected to point to modest improvement in the economy in the third quarter as a government infrastructure spree and a housing boom boosts demand from steel and glass to furniture and appliances.
Comments
Comments are closed.