TOKYO, Jan 13 (Reuters) – Benchmark TOCOM rubber futures rose more than 3 percent in morning trade on Wednesday, rebounding from a seven-year low and helped by Thailand’s plans to buy rubber at above-market prices to support farmers.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for June delivery JRUc6 0#2JRU: rose 4.6 yen to 151.5 yen per kg by 0038 GMT, after settling down 2.6 yen on Tuesday. The benchmark contract had fallen as low as 144.5 yen, the lowest since March 2009.
Thailand’s government will buy rubber directly from farmers at prices of up to 60 baht a kilogram, nearly double the market price, in a bid to placate increasingly disgruntled farmers as prices dip to a seven-year low, the cabinet said on Tuesday.
The Thai government has been anxious to head off protests from rubber farmers in parts of the south, who traditionally form part of the support base for the ruling royalist-military elite.
China is expected to post its weakest economic growth since the global financial crisis in the fourth quarter, putting more pressure on policymakers to take more steps to ward off a sharper slowdown that could jolt global markets.
The market was waiting on China’s trade data, which is usually released around 0200 GMT.
MARKET NEWS
The U.S. dollar was quoted around 117.83 yen JPY= , slightly stronger than Tuesday afternoon. FRX/
Japan’s benchmark Nikkei stock average .N225 was up 1.8 percent. MKTS/GLOB
Oil fell briefly below the widely watched $30-per-barrel level on Tuesday, extending a selloff that has sliced almost 20 percent off prices this year amid deepening concerns about fragile Chinese demand and the absence of output restraint.
DATA/EVENTS (GMT)
The following data is expected on Wednesday: (Time in GMT)
n/a China Trade data Dec
– 1000 Euro zone Industrial output Nov
– 1900 U.S. Federal budget Dec
(Reporting by Osamu Tsukimori; Editing by Richard Pullin)
