TOKYO (April 19): Benchmark Tokyo rubber futures rose on Tuesday, rebounding from a one-week low hit in the previous session, as higher oil prices raised risk appetite for broad commodities while a softer yen and gains in Tokyo equities also lent support.
The TOCOM rubber contract for September delivery <0#2JRU:> finished 2.4 yen, or 1.3%, higher at 189.9 yen (US$1.74) per kg. On Monday, it had hit its lowest level since April 12 at 185.3 yen.
“Rubber, along with other commodities such as iron ore, was lifted as investors’ risk appetite grew after oil prices bounced back,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Oil prices rose on Tuesday as a strike in Kuwait cut huge amounts of crude out of the supply chain, but analysts said the disruption would be short-lived and that markets would soon refocus on a global supply glut.
As risk appetite recovered, the safe-haven, low-yielding yen slipped. The dollar was 0.1% higher at 108.95 yen, having bounced back from a one-week low of 107.75 hit on Monday.
Japanese stocks soared after a weaker yen and a bounce in oil prices helped the market reverse the previous day’s steep decline.
“Still, it seems risk money is flowing directly into commodities, more than into equities, when oil prices gain. Rubber prices will likely trace oil for a while,” Yoshida said.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 225 yuan to finish at 12,740 yuan (US$1,968.60) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 149.6 US cents per kg, up 0.5 cent.
(US$1 = 109.1000 yen)
(US$1 = 6.4716 Chinese yuan)
