TOKYO (Nov 26): Benchmark Tokyo rubber futures jumped more than 4% to a one-month high on Thursday, as surging Shanghai futures led investors to quickly unwind short positions while firmer Tokyo equities also lifted market sentiment, dealers said.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have been under pressure since hitting the lowest level since July 2009 earlier this month amid nagging worries over sputtering growth in top buyer China.
But the TOCOM rubber contract for May delivery <0#2JRU:> closed 6.6 yen, or 4.2%, higher at 164.7 yen (US$1.34) per kg, after climbing to as high as 166.9 yen, the highest since Oct 26. It also marked the biggest one-day leap since May this year.
“A sharp rise in Shanghai rubber prompted a flurry of buys from early trade,” said a Tokyo-based dealer who declined to be named.
The most-active rubber contract on the Shanghai Futures Exchange for May delivery soared 340 yuan, or 3.5%, to finish at 10,105 yuan (US$1,581.50) per tonne. It also hit a one-month high of 10,350 yuan in early trade.
“Aggressive buying from funds to unwind their short positions lent another support,” the dealer said.
On the upside, the Nikkei share average rebounded 0.5% on Thursday.
“We will see more position adjustments on Friday as it is near the end of the month,” he added.
The front-month rubber contract on Singapore’s SICOM exchange for December delivery last traded at 115.5 U.S. cents per kg, up 0.5 cent.
(US$1 = 122.5300 yen)
(US$1 = 6.3895 Chinese yuan)
