TOKYO (Dec 21): Benchmark Tokyo rubber futures rose to a 1-week high on Monday, shrugging off the yen’s surge, slumping oil prices and weaker Tokyo stock prices, as a jump in Shanghai futures by nearly 6% lent support, dealers said.
The Tokyo Commodity Exchange rubber contract for May delivery <0#2JRU:> finished 4.1 yen, or 2.5%, higher at 166.8 yen (US$1.37) per kg. It earlier climbed to a high of 167.0 yen, the highest since Dec 14.
The December contract expired at 148.5 yen on Monday.
“The Tokyo market did not react to the yen’s gain, falling oil prices and softer Nikkei stock index, but it followed a jump in Shanghai futures,” said Toshitaka Tazawa, analyst at Fujitomi Co.
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The most-active rubber contract on the Shanghai futures exchange for May delivery rose 605 yuan to finish at 10,755 yuan ($1,659.52) per tonne, despite an increase in inventories.
China’s blue-chip CSI300 index jumped to a four-month high on Monday, led by broad rallies in real estate, banking and consumer plays as investors scooped up modestly-priced big caps.
The dollar eased to 121.20 yen and further away from Friday’s brief peak of 123.59, in light Asian trading on Monday amid doubts about how far and fast the Federal Reserve would raise US interest rates next year.
A higher Japanese currency makes yen-denominated assets less affordable when purchased in other currencies.
Brent crude fell to levels last seen in 2004 on Monday, dropping under the lows hit during the 2008 financial crisis on renewed worries over an oil glut, with analysts saying prices could head lower still.
Japanese stocks edged down in thin trading on Monday after the yen gained against the dollar, putting pressure on exporters after the Bank of Japan disappointed markets with minor adjustments to its massive stimulus programme.
“The TOCOM got a boost by Shanghai today, but it is likely to stay within a range of 160-170 yen in light trade for the rest of the year as some dealers go away for holidays,” Tazawa said.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 117.5 US cents per kg, up 1.4 cent.
($1 = 6.4808 Chinese yuan)
($1 = 121.4300 yen)
