TOKYO, March 30 (Reuters) – Benchmark TOCOM rubber futures rebounded on Wednesday helped by short-covering, but gains are likely to be capped by a stronger yen against the dollar after Federal Reserve Chair Janet Yellen emphasised the need to proceed cautiously on tightening policy.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for September delivery JRUc6 0#2JRU: was up 1.3 yen, or 0.7 percent, at 178.2 yen per kg as of 0040 GMT, after dropping 2 percent the previous day. RUB/T
Fed Chair Yellen said on Tuesday the U.S.central bank should proceed only cautiously as it looks to raise interest rates, pushing back on a handful of her colleagues who have suggested another move may be just around the corner.
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Japan’s industrial output fell 6.2 percent in February after the prior month’s solid gain, government data showed on Wednesday, underscoring fragile factory activity due to sluggish demand both at home and abroad.
MARKET NEWS
The U.S. dollar was quoted around 112.44 yen JPY= early on Wednesday, against 113.69 yen in late Asian trade the previous day.It fell sharply after Fed Yellen’s comment.
A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.
Japan’s benchmark Nikkei stock average (XC0009692440) was down 0.5 percent in Wednesday trade, pressured by a stronger yen.
U.S.crude futures rebounded in early Asian trade on Wednesday, buoyed by a forecast of a less than expected build in crude oil stockpiles last week, although concern over an oversupplied market and a stronger dollar put a ceiling on gains.
DATA/EVENTS (GMT)
The following data is expected on Wednesday: (Time in GMT)
0900 Euro zone Business climate Mar
1200 Germany Consumer prices Mar
1215 U.S. ADP national employment Mar
1700 Federal Reserve Bank of Chicago President Charles Evans speaks on current economic conditions and monetary policy
(Reporting by Yuka Obayashi; Editing by Joseph Radford)
