TOKYO, Dec 17 (Reuters) – Benchmark TOCOM rubber futures rose on Thursday, snapping a five-day losing streak, as investors covered short positions after the Federal Reserve hiked rates for the first time since 2006, boosting the dollar against the yen. A weaker Japanese currency makes yen-denominated assets more affordable when purchased in other currencies.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for May delivery JRUc6 0#2JRU: rose 2.8 yen, or 1.7 percent, to 163.8 yen ($1.34) per kg by 0052 GMT, after falling to a 3-week low the previous day. RUB/T
In a well-flagged move, the Fed raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a prolonged debate about whether the economy was strong enough to withstand higher borrowing costs.
Crude rubber inventories at Japanese ports stood at 9,088 tonnes as of Nov. 30, down 6.7 percent from the last inventory date, data from the Rubber Trade Association of Japan showed on Wednesday.
Toyota Motor Corp (TOYOF) said it expected group-wide global vehicle sales to stay flat in 2016 at 10.11 million vehicles, likely keeping it ahead of rivals Volkswagen AG VOWG_p.DE and General Motors Co GM.N as the world’s top-selling automaker.
MARKET NEWS
The U.S. dollar edged up 0.2 percent to 122.43 yen JPY= after rising 0.5 percent overnight. The greenback momentarily fell to as low as 121.38 as volatility briefly followed after the Fed took a step towards normalising monetary policy late on Wednesday.
Japan’s benchmark Nikkei stock average (XC0009692440) jumped more than two percent on Thursday as investors chose to take an historic hike in U.S.interest rates as a mark of confidence in the world’s largest economy.
Oil fell as much as 5 percent on Wednesday after U.S. government data showed a big, surprise build in crude inventories and the Fed hiked rates, a move that should support the dollar and pressure commodities prices.
Copper rose on Wednesday, recovering from a one-week low hit a day earlier as a dollar rally petered out and metals investors covered short positions ahead of an expected U.S.rate rise.
DATA/EVENTS (GMT)
The following data is expected on Thursday: (Time in GMT)
0900 Germany Ifo business climate Dec
1000 Euro zone Labour costs Q3
1330 U.S. Current account Q3
1330 U.S. Weekly jobless claims
1330 U.S. Philly Fed business index Dec
1500 U.S. Leading index Nov
($1 = 122.4600 yen)
(Reporting by Yuka Obayashi; Editing by Ed Davies)
