TOKYO, Jan 29 (Reuters) – Benchmark Tokyo rubber futures rebounded on Wednesday after eight straight sessions of losses as investors looked for bargains, and a weaker yen while gains in the Japanese stock market also prompted buy orders, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for July delivery rose 4.4 yen, or 1.9 percent, to settle at 232.5 yen ($2.26) per kg, recovering from a seven-month low hit the previous day.
The contract earlier rose as high as 234.3 yen, after an about 9-percent drop in the past eight trading days.
“Higher equities prices and softer yen gave a boost to the rubber market,” Hiroyuki Kikukawa, general manager at Nihon Unicom Inc, said.
The dollar gained on yen on Wednesday after Turkey’s sharp interest rate hike eased some fears about capital flight from emerging markets.
Japan’s Nikkei share average jumped 2.7 percent, its biggest gain in almost five months.
“Trading volume has been high in the past three days and we may see more fresh buying as many investors have cut losses or adjusted their positions,” Kikukawa said, adding that political uncertainty in Thailand and low supply season in rubber producing areas between February and May could also support the market.
Thailand’s government will deploy 10,000 police in the capital for Sunday’s election, which protesters have promised to disrupt as part of their drawn-out attempt to topple Prime Minister Yingluck Shinawatra.
The front-month rubber contract on Singapore’s SICOM exchange for February delivery last traded at 195.0 U.S. cents per kg, up 1.5 cents. ($1 = 102.7900 Japanese yen) ($1 = 6.0508 Chinese yuan) (Reporting by Yuka Obayashi; Editing by Anand Basu)