TOKYO (Aug 26): Benchmark Tokyo rubber futures edged higher on Wednesday, bouncing back from a 6-year low hit the previous day after China’s rate cut, but scepticism about the effect of the government measure capped gains, dealers said.
The new Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery <0#2JRU:> finished at 171.9 yen ($1.44) per kg, up 1.9 yen, or 1.1%, from the opening price of 170 yen. It earlier touched a high of 174.9 yen, before giving up some of the gains.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, fell to 165.1 yen on Tuesday, the lowest since July 17, 2009.
“China’s monetary easing initially prompted a flurry of buys, but gains were limited as investors became uncertain that the rate cut would actually bolster the country’s economy,” said Satoru Yoshida, commodity analyst at Rakuten Securities.
Related Post
On the downside, China’s turbulent stock markets slipped again on Wednesday, as a double-barrelled blast of central bank stimulus failed to convince investors of Beijing’s ability to jolt the world’s second biggest economy out of its slowdown.
That pushed the most-active rubber contract on the Shanghai futures exchange for January delivery down 160 yuan to finish at 11,170 yuan ($1,742.73) per tonne.
“It seems rubber prices have missed a chance for technical bounce-back. Given nagging concerns over China’s slowing demand and volatile stock market, the TOCOM benchmark is expected to test 160 yen soon,” Yoshida said.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 124.2 US cents per kg, down 2.7 cent.
($1 = 6.4095 Chinese yuan renminbi)
($1 = 119.5200 yen)
