TOKYO (Feb 15): Benchmark Tokyo rubber futures jumped to a 1-week high on Monday as surging Japanese equities and a softer yen eased concerns about the gloom in global financial markets, prompting a flurry of short-covering, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery <0#2JRU:> finished 6.5 yen, or 4.4%, higher at 153.6 yen (US$1.35) per kg.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, plunged last week to a seven-year low of 144.5 yen hit in January and lost 5% for the week.
“Higher Tokyo stock prices, the yen’s drop and a rebound in oil prices last Friday all helped bolster market sentiment,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Japanese stocks took cues from rallies in Europe and on Wall Street to rebound more than 7% on Monday, shrugging off data that showed Japan’s economy contracted more than expected in the final quarter of 2015.
The US dollar edged up to 113.90 yen, having touched a 15-month trough just under 111.00 last week.
Brent and US crude futures edged lower on Monday as the dollar regained ground, but they held most of their gains of more than 10% from Friday that came amid renewed talk that the Organization of the Petroleum Exporting Countries might finally agree to cut output to reduce a world glut.
“The TOCOM benchmark is in the process of making a w-shaped bottom which also attracted technical buys, but it needs to hit January’s high of 166.3 yen to get a real bullish trend,” Kikukawa said.
Rubber futures in China, which resumed trading after the week-long Lunar New Year holiday, also also largely shrugged the much-weaker-than-expected Chinese trade data.
January exports fell 11.2% from a year earlier, while imports dived 18.8%, suggesting the world’s second-largest economy is still losing steam.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 295 yuan to finish at 10,530 yuan (US$1,621.60) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 109.0 US cents per kg, up 3.0 US cent.
(US$1 = 113.7800 yen)
(US$1 = 6.4936 Chinese yuan)
