TOKYO (Aug 5): Benchmark Tokyo rubber futures climbed on Wednesday, snapping three sessions of losses and recovering from a 6-1/2-month low hit the previous day, as bargain-hunting kicked in on the back of a softer yen and easing Chinese equities, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 1.1 yen, or 0.6 percent, lower at 195.6 yen ($1.57) per kg.
“The yen’s weakness and less volatility in the Chinese stock market prompted buys,” said Satoru Yoshida, commodity analyst at Rakuten Securities.
The dollar extended gains against the yen on Wednesday after Atlanta Federal Reserve President Dennis Lockhart expressed support for an interest rate hike in September.
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Lockhart has said it would take “significant deterioration” in the U.S. economy for him to not support a rate hike in September, according to the Wall Street Journal.
China stocks fell on Wednesday, regardless of both a promise by the central bank to stabilise market expectations and a private survey which showed activity in the services sector accelerated last month.
“It’s hard to predict which direction the market is heading,” Rakuten’s Yoshida said.
“TOCOM prices are likely to stay in a rather wide range between near last October’s low of 175 yen and June’s high of 250 yen as investors are divided on the outlook for the Chinese economy, impact from a U.S. interest rate hike as well as lower oil prices,” he said.
The most-active rubber contract on the Shanghai Futures Exchange for January delivery rose 60 yuan to finish at 12,255 yuan ($1,973.56) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 136.5 U.S. cents per kg, down 1.2 cent.
($1 = 124.4000 yen)
($1 = 6.2096 Chinese)
