TOKYO (Feb 19): Benchmark Tokyo rubber futures inched higher in thin trade on Friday, booking its first weekly gain in four and a recovery from the last week’s 7-year low, as position adjustment buys outweighed fears over a slumping Nikkei and a stronger yen.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery <0#2JRU:> finished 0.6 yen, or 0.4%, higher at 153.2 yen (US$1.36) per kg.
For the week, TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, marked a 4.1% gain.
“The market was very quiet,” said Jiong Gu, analyst at Yutaka Shoji Co.
“TOCOM ended slightly higher due mainly to position adjustments ahead of the weekend,” he said.
The Nikkei share average fell 1.4% on Friday as a stronger yen and retreating oil prices sapped risk appetite.
The dollar was down 0.4% at 112.83 yen on Friday, creeping back towards a 15-month low near 111.00 set last week. The greenback nearly touched 115 on Tuesday but was poised to lose 0.4% on the week.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Oil futures fell in Asian trade on Friday as a record build in US crude stocks stoked concerns about global oversupply, outweighing moves by oil producers including Saudi Arabia and Russia to cap oil output.
The rubber market tends to move higher in the dry wintering season, but prices have been more sensitive to external financial markets and oil prices so far this year, dealers said, adding that the trend is expected to continue next week.
Rubber is tapped year round but latex output drops during the dry wintering season, when trees shed leaves. Wintering in Thailand and Malaysia lasts from February to April.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 120 yuan to finish at 10,615 yuan (US$1,627.79) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 108.6 US cents per kg, up 0.4 US cent.
(US$1 = 113.0200 yen)
(US$1 = 6.5211 Chinese yuan)
