TOKYO, April 12 (Reuters) – Benchmark TOCOM rubber futures hit an 8-month high on Tuesday as stronger oil prices stoked risk-appetite, while expectations of a pick-up in Chinese demand and concerns over lower supply due to bad weather in Southeast Asia also supported prices.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for September delivery JRUc6 0#2JRU: was up 3.5 yen, or 1.9 percent, at 188.7 yen ($1.74) per kg as of 0045 GMT. It earlier hit 190.2 yen, the highest since Aug. 18 last year and surpassing last week’s high of 188.4 yen.
China’s producer prices fell less than expected in March, while consumer inflation stabilised, a sign that strong deflationary pressures in the country’s industrial sector may be lessening.
Japan’s weather bureau said on Monday there was a high possibility that a La Nina weather pattern would emerge in summer after El Nino ends.
The ongoing El Nino – a warming of sea-surface temperatures in the Pacific that typically leads to scorching weather across Asia and East Africa but heavy rains and floods in South America – has already been linked to serious crop damage, forest fires and flash floods.
MARKET NEWS
Brent crude prices touched a four-month high on Monday in a rally fueled by strong markets across commodities, ahead of a meeting of oil producers in Doha next Sunday aimed at freezing current output levels. O/R
The U.S. dollar was steady at 107.93 yen JPY= early on Tuesday, not too far from a 17-month low of 107.63 struck on Monday. FRX/
Japan’s benchmark Nikkei stock average (XC0009692440) was up 0.7 percent in Tuesday trade, despite a firm yen against the U.S.dollar.
DATA/EVENTS (GMT)
The following data is expected on Tuesday: (Time in GMT)
0600 Germany Wholesale price index Mar
0830 Britain Consumer prices Mar
1000 U.S. NFIB business optimism Mar
1230 U.S. Import prices Mar
1230 U.S. Export prices Mar
1800 U.S. Federal budget Mar
($1 = 108.1400 yen)
(Reporting by Yuka Obayashi; Editing by Joseph Radford)
